(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "International proliferation of nuclear technology: a report"

y 4, ?> 8/w>a 



94th Congress ) 
2d Session / 



COMMITTEE PRINT NO. 15 






INTERNATIONAL PROLIF 
NUCLEAR TECH/ 




A REPORT PREPARED J 

THE SUBCOMMITTEE ON 
THE ENVIROXMI 

OF THE 

COMMITTEE OX 
INTERIOR AXD INSULAR AFFAIRS 

OF THE 

U.S. HOUSE OF REPRESENTATIVES 
NINETY-FOURTH CONGRESS 

BY 

Warrex II. Donnelly. Senior Specialist, Energy 

and 

Barbara Rather, Reference Assistant 
Environment and Natural Resources Policy Division 
Congressional Research Service 
Library of ( 'oneri 




APRIL 15. 1976 



Printed for the use of the 
Committee on Interior and Insular Affairs 



ro-303 1 > 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1976 



COMMITTEE ON INTERIOR AND INSULAR AFFAIRS 

House of Representatives 

JAMES A. HALEY. Florida. Chairman 



R< »Y A. TAYLOR, North Carolina 
HAROLD T. JOHNSON. California 
MORRIS K. UDALL. Arizona 
PHILLIP BURTON. California 
ROBERT \V. KASTENMEIER. Wisconsin 
PATSY T. MINK. Hawaii 
LLOYD MEEDS. Washlnpt.-n 
ABRAHAM KAZEN. Jr.. T< 
ROBERT G. STEPHENS. Jr., G- 

II P. YIGORITO. Pennsylvania 
JOHN MELCHER. Montana 
TEND RONCALIO, Wyoming 
JONATHAN B. BINGHAM, New York 
JOHN P. SEIBERLING. Ohio 
HAROLD RUNNELS, New Mexico 
ANTONIO BORJA WON PAT, Guam 
HON DB LUGO, Virgin Islands 
BOB ECKHARDT, Texas 
GOODLOE E. BYRON, Maryland 
JAIME BENITEZ, Puerto Rico 
JIM SANTINI, Nevada 
PAUL E. TSONGAS, Massachusetts 
ALLAN T. HOWE, Utah 
JAMES WEAVER, Oregon 
BOB CARR, Michigan 
GEORGE MILLER, California 
THEODORE M. (TED) RISENIIOOYER. 

Oklahoma 
JAMES J. FLORIO, New Jersey 



JOE SKUBITZ. Kansas. Ranking Minority 

Member 
SAM STEIGER, Arizona 
DON H. CLAUSEN. California 
PHILIP E. RUPPE. Michigan 
MANUEL LUJAN, Jr.. New Mexico 
KEITH G. SEBELIUS, Kansas 
ALAN STEELMAN. Texas 
DON YOUNG. Alaska 
ROBERT E. BAUMAN, Maryland 
STEVEN D. SYMMS. Idaho 
JAMES P. (JIM) JOHNSON. Colorado 
ROBERT J. LAGOMARSINO. California 
VIRGINIA SMITH. Nebraska 
SHIRLEY N. PETTIS. California 



Charles Conklix, staff Director 

LEI McELVAINj General Counsel 

MICHAEL C. MARDEN, Minority Counsel 

Henry R. Myers, Special Consultant on Nuclear Energy Matters 



Subcommittee on Energy and thb Environment 

MORRIS K. UDALL. Arizona, Chairman 



ALAN STEELMAN, T< 
JOE SKUBITZ. Kansas 
SAM STEIGER, Arizona 
MANUEL LUJAN, Jr., New Mexico 
ROBERT i: BAUMAN, Maryland 
STEVEN D SYMMS, Idaho 



JAIME BENITEZ, Puerto Rico 
Jonathan B. BINGHAM, New York 
BOB CARR, Michigan 
RON di LUGO, Virgin islands 
BOB ECKHARDT, Texas 
John MELCHER, Montana 
GEORGE MILLER, California 
TENO Ronoalio, Wyoming 
JOHN i SEIBERLING, Ohio 
PAUL E. TSONGAS, Massachui • 
JOSEPH P. VIGORITO, Pennsylvania 
JAMES weaver, Oregon 

Stanley E. Scovilli i mel 

Mich iel B Mi i t fcffnoi ity 8i 



coromll ■ 



•halrman of the full committee la an ez officio voting member of thl 
iir-t listed mlnorltj member le counterpart to ih<' subcommittee chairman 







The Library of Congress 

Congressional Research Service 
Washington, DC. 20540 



INTERNATIONAL PROLIFERATION OF NUCLEAR TECHNOLOGY 



A report prepared for 

The Subcommittee on Energy and the Environment 

of the House Committee on Interior and Insular Affairs 



By 

Warren H. Donnelly, Senior Specialist, Energy 

and 

Barbara Rather, Reference Assistant 

Environment and Natural Resources Policy Division 

March 1976 

(III) 



NINETY-FOURTH CONGRESS 
JAMES A HALEY FLA.. CHAIRMAN 



IV 



COMMITTEE ON INTERIOR AND INSULAR AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 
WASHINGTON. D.C. 20515 




April 14, 1976 



Members of the Committee on Interior 

and Insular Affairs 
U.S. House of Representatives 
Washington, D.C. 20515 

Dear Colleagues: 

During the past twelve months, this Committee's Subcommittee 
on Energy and the Environment held a series of hearings on 
subjects within its special oversight jurisdiction covering 
"nonmilitary nuclear energy and research and development, 
including the disposal of nuclear waste," 

The purpose of the hearings was to obtain information on the 
international transfer of nuclear material and components 
intended for peaceful uses. The testimony heard by the Sub- 
committee should assist the Congress in identifying methods 
of controlling the export of nuclear technology by our com- 
mercial nuclear industry, which could ultimately result in 
impeding the manufacture of nuclear weapons by other nations. 

Because this issue is one of the most crucial of our time. I 
am forwarding to you the nnclosed report on the International 
Proliferation of Nuclear Technology, which was prepared by the 
Congressional Research Service of the Library of Congress and 
was based upon our Subcommittee's hearings. 

With best wishes, I am 



isure 




NINETY-FOURTH CONGRESS 

~_ STAFF DIRECTOR 

COMMITTEE ON INTERIOR AND INSULAR AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 
WASHINGTON. D.C. 20515 

April 12, 1976 



JAMES A. HALEY. 


FLA., CHAIRMAN 


ROY A. TAYLOR. N.C. 


JOE SKUBITZ, KANS. 


HAROLD T. .IOHNSON. CALIF. 


SAM STEIGER, ARIZ. 




DON H. CLAUSEN, CALIF. 


PHILLIP BURTON. CALIF. 


PHILIP E. RUPPE, MICH. 




MANUEL LUJAN, JR., N. MEX. 


PATSY T MINK. HAWAII 


KEITH G. SEBELIUS. KANS. 




ALAN STEELMAN, TEX. 


ABRAHAM KAZEN. JR., TEX. 


DON YOUNG. ALASKA 


ROBERT G. STEPHENS, JR., CA. 








JOHN MELCHER, MONT. 


JAMES P. (JIM) JOHNSON. COLO. 


TENO RONCALIO. WYO. 


ROBERT J. LAGOMARSINO. CALIF. 



SHIRLEY N. PETTIS. 



*. (TED) 
WRIGHT PATMAN. TC 



The Honorable 

James A. Haley 

Chairman, Committee on Interior and 

Insular Affairs 
U.S. House of Representatives 
Washington, D.C. 20515 

Dear Mr. Chairman: 

The Subcommittee on Energy and the Environment requested 
the Congressional Research Service to prepare the attached 
report on international proliferation of nuclear technology. 
The report, prepared by Dr. Warren Donnelly and Ms. Barbara 
Rather, is based on hearings held by the Subcommittee during 
the past two years. 

I believe that the report and the hearings themselves 
demonstrate the urgency of our need to expend greater effort 
to prevent additional nations from gaining the ability to 
produce nuclear weapons. As the authors indicate, there is a 
large discrepancy between the expressed level of concern about 
proliferation and the willingness to incur economic and political 
costs to stem the flow. 

The hearings point the way to at least one typ-j of measure 
which would have a clear inhibiting effect. This would be to 
require that any nation receiving reactor fuels from the United 
States be required to subject all of its nuclear activities to 
the safeguards of the International Atomic Energy Agency. In 
addition, I believe that the United States should take all 
possible steps to discourage the construction of fuel 
reprocessing or enrichment plants in non-nuclear weapons 
countries. 



VI 



- 2 



The Honorable 

James A. Haley April 12, 1976 



I am also encouraged by signs that the proliferation issu< 
is being taken more seriously by various agencies of our 
government. In particular, I commend the recent action of 
the Nuclear Regulatory Commission in declining to expedite 
action concerning a license for export or uranium to India. 

The report will be of substantial use to those who seek 
to understand nuclear proliferation. 



Sincerely, 




Morris K. Udall , \Chairman 
Subcommittee on Energy and 
the Environment 




The Library of Congress 

Congressional Research Service 
Washington, DC. 20540 



March 19, 1976 



The Honorable Morris K. Udall, Chairman 
Subcommittee on Energy and the Environment 
Committee on Interior and Insular Affairs 
House of Representatives 

Dear Mr. Chairman: 

I am pleased to forward with this letter a report entitled: "international 
Proliferation of Nuclear Technology, " which was prepared at the request 
of the Subcommittee. 

The report examines the oversight hearings held by your Subcommittee 
in July 1974, and in April, May and July of 1975, for insights into problems 
of proliferation of nuclear technology and to identify matters and issues that 
may warrant further congressional attention. 

The analysis was done by Dr. Warren H. Donnelly, Senior Specialist, 
and Ms. Barbara Rather, Reference Assistant. 

We hope that you will find it useful for your continued interest in the 
subject of nuclear proliferation. 

Sincerely, 




forman Beckman 
Acting Director 

(VII) 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/alproOOunit 



TABLE OF CONTENTS 



Page 
Letter of transmittal 
Preface 

I. Summary of Observations and Issues 1 

Overall Commentary 1 

Specific Insights 2 

Proliferation and nuclear powerplants 

Proliferation and the nuclear fuel cycle 2 

Safeguarding nuclear materials and facilities 3 

Proliferation and "peaceful nuclear explosives" 5 

The challenge of proliferation 7 

Control of nuclear exports 7 

Leverage from the United States position in the 

world nuclear market 8 

The international framework for nuclear exports 

and proliferation 8 

Potential Measures for Limiting Proliferation 9 

Reducing pressures for proliferation 9 

Fostering nuclear interdependence 9 

Limiting the export of critical nuclear capabilities .... 10 

Strengthening the International Atomic Energy Agency . . 11 

II. Hearings of the Subcommittee on Energy and the Environment . 12 

The Problem of Proliferation 12 

Background of the Hearings 13 

Purpose of the Hearings 15 

Organization of the Hearings 16 

III. The Challenge of Nuclear Proliferation 18 

The Status of Proliferation 20 

Mechanisms of Proliferation 22 

Troublesome Cases 23 

Brazil 25 

Egypt 25 

Israel 27 

Peaceful Nuclear Explosives 28 

IV. Domestic Nuclear Safeguards 31 

Dimensions of the U.S. safeguards Problem 31 

Licensing of Nuclear Materials 32 

Safeguards and Physical Security 32 

The Adequacy of Safeguards 37 

Government Responsibilities for Nuclear Safeguards .... 40 

(IX) 



X 



TABLE OF CONTENTS (CONTINUED) 



Page 

V. Government Control of Nuclear Exports 43 

Commercial Transactions 44 

NRC Export Licenses 45 

Department of Commerce Export Licenses 48 

ERDA Approval of Technology Exports 49 

Legislation Affecting Nuclear Exports 52 

S. Res. 221 55 

Reorganization of nuclear export licensing 55 

A five-year moratorium on export licenses 

for nuclear powerplants p8 

Prohibition of nuclear exports without 

congressional approval 59 

Prohibition of transfer of nuclear materials 

to non-NPT nations 59 

Limit Export-Import Bank financing of nuclear 

exports to non-NPT nations 62 

Resolutions in support of stronger international 

nuclear export controls and safeguards 63 

Requiring the OTA to study safeguards measures 

for plutonium 63 

VI. The International Framework for Limiting Proliferation .... 65 

The World Nuclear Market 66 

International Agreements for Cooperation 72 

Background 72 

Statutory limitations 73 

Negotiation of agreements 75 

Contents of agreements 75 

Status of agreements 77 

The Non- Proliferation Treaty 77 

Parties to the NPT 81 

The offer to place U.S. facilities 

under IAEA safeguards 81 

Major loopholes 82 

The NPT review conference 83 

International Atomic Energy Agency Safeguards 84 

The International Atomic Energy Agency 85 

Origins of the IAEA 86 

IAEA safeguards 87 

The physical protection issue 92 

Enforcement and sanctions 94 

IAEA safeguards assessed 97 



XI 



TABLE OF CONTENTS (CONTINUED) 



Page 



International or Regional Nuclear Fuel Cycle Facilities 
Informal Agreement Among Nuclear Supplier Nations . 



100 
102 



Tables 



Table I. Some Options for a Country to Obtain 

Nuclear Materials for Weapons 24 

Table II. Bills and Resolutions ca Export Controls 

and Safeguards ar Technology 53 

Table III. Basic r ents for Nuclear 

Exports and Their Control 66 

Table IV. Project* Lli ies in the World 

Nuclear Cycle 68 

Table V. Bilateral Agreements -^ration in the 

Civil Uses of Atomic Energy 78 

Table VI. Facilities Under IAEA Safeguards 91 



XII 



PREFACE 

At the request of the Subcommittee on Energy and the Environment of 
the House Committee on Interior and Insular Affairs, the Congressional 
Research Service has analyzed the hearings held by this Subcommittee on 
international proliferation of nuclear technology. The purpose of this 
analysis and report is to highlight briefly the problem of the proliferation 
of nuclear weapons, its characteristics, the role of nuclear exports in 
proliferation, the international means for limiting further proliferation, 
and the issues posed for national policy, legislation and congressional 
oversight. The report opens with a summary of observations. There 
follow chapters on the challenge of proliferation of the ability to make 
nuclear weapons, domestic nuclear safeguards, government control of 
nuclear exports, and the international framework for limiting prolifer- 
ation. 



I. SUMMARY OF OBSERVATIONS AND ISSUES 

At the request of the Subcommittee on Energy and the Environment of 
the House Committee on Interior and Insular Affairs, the Congressional 
Research Service has analyzed hearings held by the Subcommittee on the 
international proliferation of nuclear technology. The hearings raised the 
fundamental question: Can we survive in the nuclear age? 
Overall Commentary 

On the whole, the hearings indicated a "yes -but" answer to the funda- 
mental question. Avoiding a worldwide nuclear war triggered by small- 
nation use of nuclear weapons appears reasonably certain but is by no means 
guaranteed. The chances will increase that more nations may obtain them 
and possibly use them if there is an uncontrolled expansion throughout the 
world of the industrial capacity to make and process nuclear fuel materials. 
In the years ahead, many more nations are likely to possess the means to 
make nuclear weapons if they choose to do so. Limiting the expansion or 
proliferation of the means to make nuclear weapons will call for extra- 
ordinary diplomatic efforts the success of which cannot be assumed. Also, 
avoidance of nuclear conflict or disaster will take on new dimensions if 
terrorist or other extremist groups decide to try to steal nuclear explosive 
materials to make weapons and if they succeed in doing so. 

Many witnesses assessed proliferation as probably the principal prob- 
lem of the times. Yet few called for radical measures. They opted instead 
for incremental changes and improvements in ways to limit proliferation. 

(1) 



CRS-2 



There is an incongruity between warnings of dire foreboding on one hand, 
and, on the other, international haggling over who should pay the costs of 
keeping just 40 international inspectors in the field to assure compliance 
by free world nations with their commitments to use nuclear materials only 
for peaceful purposes. If the risks are as grave as seen by some, then 
radical action is needed, action unlikely to be seriously considered by Con- 
gress on the basis of hypothetical situations. If the risks are not of cata- 
strophic imminence, then moderate and incremental measures can be ex- 
pected to attempt to reduce but not to erase risks of proliferation. 

From this viewpoint, probably the most useful congressional oversight 
will be hard-headed assessment of the risks of proliferation. 
Specific Insights 

Proliferation and nuclear power plants . --The risks of proliferation come 
from the spreading of industrial facilities that can produce fissionable ma- 
terials of weapons quality, not from the spread of nuclear powerplants alone. 
The normal or slightly enriched uranium used in most contemporary power 
reactors are not nuclear explosives. The used fuels from these reactors 
do contain the nuclear explosive plutonium, but as long as the plutonium 
is not separated, it remains protected by the intense radiation characteristic 
of used fuel. Highly enriched uranium and uranium-233 also can be used 
as nuclear explosives. 

Proliferation and the nuclear fuel cycle . --If plutonium, highly enriched 

uranium, or uranium-233 become practical nuclear fuels in the future, then 

will have to be industrial plants to produce and use these materials. 



8 



Cft$--S 



The spread of such facilities will increase the prospects that nations pos- 
sessing them can quickly make nuclear bombs, or that terrorists can find 
a weak link where they might steal these materials. If and when that time 
comes, the safest place for nuclear fuel materials will be inside an oper- 
ating reactor. 

Safeguarding nuclear materials and facilities . --If nuclear power is to 
be used widely throughout the world, then effective measures to deter diver- 
sion of nuclear materials from civil nuclear power to clandestine national 
manufacture of nuclear weapons, and to pofsveitf theft of nuclear materials 
by terrorist or other subnational groups become increasingly important. Hi 
the nuclear age, "safeguards" refers to systems of equipment, personnel 
and procedures designed to discourage the further spread of nuclear weapons 
by assuring early detection and announcement of diversion or theft of nuclear 
materials from safeguarded uses. Safeguards are not designed to detect 
clandestine production of nuclear weapons materials from non^power 
sources. Safeguards systems are applied by some but not all individual 
nations. The International Atomic Energy Agency (IAEA) also can, upon 
request, apply safeguards to nuclear materials in specified facilities in some 
countries or to all peaceful uses of nuclear materials in other countries 
that have ratified the Treaty on Non- Proliferation of Nuclear Weapons (NPT). 
Note: there is no blanket commitment by all nuclear nations to place all 
of their nuclear activities under IAEA safeguards, or to use nuclear ma- 
terials only for peaceful purposes. The United States, the Soviet Union, 
the United Kingdom, France and China all possess nuclear weapons and con- 
tinue to make them. India has tested a "peaceful nuclear explosive. " The 



CRS-4 

United States' concept of safeguards also includes security measures to 
prevent theft of nuclear materials or sabotage of nuclear facilities. Other 
countries and the IAEA limit their concept of safeguards to detection and 
announcement of diversion or theft. For them protection of nuclear ma- 
terials is a normal police -type function. Whether the United States can per- 
suade other nations to incorporate U. S. physical security concepts into their 
safeguards systems remains to be seen. 

On the whole, the hearings would support the conclusion that present 
national and IAEA safeguards appear reasonably sufficient to assure detec- 
tion and announcement of diversion for world nuclear power fueled with 
natural or slightly enriched uranium. However, the world's safeguards 
systems appear inadequate in manpower, equipment, funding and access of 
inspectors to provide the same assurance of detection and announcement if 
and when highly enriched uranium, uranium -2 3 3 or plutonium become widely 
used as nuclear fuels. Also, IAEA and related national safeguards systems 
do not assure minimum standards for protection against theft or sabotage 
by subnational groups. Finally, IAEA safeguards are not backed by pre- 
scribed, credible sanctions against nations that divert materials from civil 
nuclear power, or that abrogate their commitments not to use nuclear ma- 

ls to make bombs. 

As for the United States nuclear industry, it remains to be seen whether 
safeguards based upon a regulatory approach, with all the attendant prob- 
lems of opposition, delay and minimal compliance, will be sufficient. If 

urrent U.S. system is found lacking, then a return to direct Government 



CRS-5 

ownership of all fissionable materials and direct Government operation of 
safeguards systems within the United States may become necessary. At 
present, most of the weapons -grade materials in the United States are under 
safeguards of the Energy Research and Development Administration (ERDA) 
and its contractors, rather than under regulatory controls of the Nuclear 
Regulatory Commission (NRC). 

Much has been said about the safeguarding of nuclear materials and faci- 
lities from diversion or theft and from attack or sabotage. It was clear 
in the hearings that no safeguards system can prevent the diversion or theft 
or clandestine production of fissionable materials. Nor can safeguards ab- 
solutely guarantee that every theft or diversion, no matter how small, will 
always be detected. As the volume of nuclear materials in commerce in- 
creases, the chance of undetected diversion or theft will increase. The 
best that can be hoped for is assurance that diversion or theft will be made 
hard enough to discourage attempts, and that attempted or actual diversion 
or theft will be detected and announced early enough for effective remedial 
action. 

Proliferation and "peaceful nuclear explosives . "--The idea of "peaceful 
nuclear explosives" has fascinated many engineers. At the moment no na- 
tion is using peaceful nuclear explosives (PNE) for civil engineering pur- 
poses. The Soviet Union, however, continues to show interest in nuclear 
explosions for large-scale earth-moving projects. Moreover, the use of 
PNE devices is made legitimate by the NPT. Article 5 of the Treaty ob- 
ligates the parties to undertake that "potential benefits from peaceful 



CRS-6 

applications of nuclear explosions will be made available to non-nuclear 
weapons states Party to the Treaty on a non- discriminatory basis" and that 
the charge to such Parties will be "as low as possible. " The article spe- 
cifies that the benefits of PNEs shall be obtained "pursuant to a special in- 
ternational agreement or agreements, " and committed NPT Party states to 
start negotiating such agreements as soon as possible after the Treaty en- 
tered into force. These negotiations have been going on since October 1974 
but are not yet completed. The emphasi* in Article 5 on non-diBcriminatory 
supply of PNE services at low cost reflects the optimism of nuclear engi- 
neers in the late 1960s that these devices had a promising future, an opti- 
mism which has largely disappeared in the United States. Although the 
prospects for practical use of PNE devices in the United States has declined 
greatly since the NPT entered into force, the IAEA is preparing future 
arrangments to govern their use and at some time in the future other nations 
may approach the United States, the Soviet Union, the United Kingdom, 
France, or perhaps even India, for PNE services. 

The commercial use of PNEs is expected to increase the probability 
of further proliferation of new types of nuclear weapons, or vertical pro- 
liferation, as well as the probability that other nations might start to make 
so-called peaceful devices. The Government of India in testing a nuclear 
explosive in May 1974 took the position that it was not contributing to pro- 
liferation of nuclear weapons because the device it tested was designed 
for peaceful uses. Future use of peaceful nuclear explosives can increase 
the probabilities of proliferation of new weapons by the nuclear weapons 
nations. 



CRS-7 

The challenge of proliferation . --There is now no way to prevent more 
countries from acquiring nuclear weapons if they want to. Even if all 
nuclear materials in the world were gathered up and buried deep in the sea, 
all nuclear scientists and engineers isolated from society, and all nuclear 
facilities and mines dismantled, the knowledge of fission in uranium and plu- 
tonium is all that other scientists and engineers would need to recreate the 
situation that exists today. So with less drastic measures, proliferation 
cannot be stopped. It can be slowed down and made less attractive to nations 
that might be tempted to make nuclear weapons. Herein lies the challenge 
of proliferation: How to limit and slow the further spread of the capa- 
bility to produce nuclear materials for nuclear weapons. The objective is 
to gain time to create international conditions that can remove or reduce 
pressures upon nations to opt for nuclear weapons. 

Control of nuclear exports . --Limiting or preventing the export of plant, 
equipment and technology for sensitive nuclear fuel facilities (enrichment 
and reprocessing) is one powerful way to slow the pace of proliferation. The 
United States has engaged in informal diplomatic efforts to convince world 
nuclear suppliers to agree upon such limitations, but with limited success. 
Some nuclear nations still are not agreed to halt export of sensitive nuclear 
fuel technology and equipment. As for the United States, it has policies 
and procedures to control such exports. Some policy and organizational 
changes appear to be needed. Some Members of Congress believe such 
changes should not reduce the authority of the Nuclear Regulatory Commis- 
sion to make a final, independent decision upon specific nuclear exports. 



CRS-8 

Leverage from the United States position in the world nuclear market . -- 
The United States until recently enjoyed international influence derived from 
its virtual monopoly of free -world uranium enrichment. That monopoly 
is breaking up now that the Government's enrichment plants are fully booked 
and new enrichment capacity cannot be added for many years. Meanwhile, 
some other nations are building their own enrichment facilities. The Soviet 
Union also has moved into the world enrichment market, although whether 
it can give good commercial service remains to be seen. Also, the U.S. 
position is affected as other industrial nations offer improved nuclear power- 
plants, frequently based upon U.S. technology. The emergence of Canada 
as an exporter of nuclear power plants that use natural uranium for fuel and 
the prospects that the United Kingdom may offer such reactors can also di- 
minish the future U.S. share of the world nuclear power market. 

The weakened market position for the United States would mean both 
loss of income from foreign sales, and loss of influence over the policies of 
nations using nuclear power. 

The international framework for nuclear exports and proliferation . --A 
well established international framework now exists for U.S. nuclear ex- 
ports. The United States has a far-flung web of international agreements 
for cooperation which provides the basis for commercial export orders. The 
Department of State and the Energy Research and Development Adminis- 
tration negotiate the fundamental agreements for nuclear cooperation. 
Within these, the Nuclear Regulatory Commission and the Department of 
Commerce govern the export of physical things; ERDA governs the export 



CRS-9 

of the most sensitive nuclear power technologies; and the Export-Import 
Bank finances most of the U.S. exports of nuclear powerplants. This 
framework exists, however, at the forebearance of other governments and 
could easily be disrupted. It is not strong enough now to prevent the export 
of critical nuclear technologies by other countries nor can it support sub- 
stantial sanctions against those nations that divert nuclear materials from 
peaceful to military uses. 
Potential Measures for Limiting Proliferation 

Many United States initiatives can be proposed to limit further prolifer- 
ation of the ability to make nuclear weapons and national decisions to do so. 
Most would require legislation and subsequent oversight to see how well they 
are carried out. Major approaches to curbing weapons proliferation which 
emerged from the hearings include the following: 

Reducing pressures for proliferation . --Diplomatic initiatives could seek 
to reduce world tensions and to provide for resolution of conflicts between 
nations without resort to armed force. This would reduce pressures on 
governments to make nuclear weapons. Conceivably, the International 
Atomic Energy Agency could also help to persuade nations not to acquire 
nuclear weapons by supplying them with technical advice and assistance on 
alternative non-nuclear sources of fuels and energy, and by increasing their 
confidence that the world community of nations will be informed of diversion 
of nuclear materials early enough to take remedial action. 

Fostering nuclear interdependence . --Many nations now see nuclear 
independence as a solution to their problems with the supply of oil from 



10 



CRS-10 

highpriced and potentially unreliable sources. Nuclear independence, 
however, means the acquisition of nuclear fuel cycle capabilities which could 
be diverted to production of weapons. One way to limit this spread of the 
nuclear base is to encourage the alternative of nuclear interdependence. 
Interdependence would make nations less likely to ( .. lateral actions 

contrary to peace. Interdependence would be prcmct- istruction and 

operation of multinational, regional nuclear fuel cycle facilities, as has been 
proposed by Secretary Kissinger. 

Limiting the export of critical nuclear c a pabi i nother way to 

limit proliferation is for the United States to nersv r nuclear ex- 

porting countries not to export the technology, or equipment needed to 

produce or reprocess nuclear fuels, or special r used in such faci- 

lities, such as heavy water. Controlling thi n.ional spread of laser 

enrichment technology and centrifuge technologv can become a proliferation 
problem if either technology should prove practicr. 

For U.S. nuclear exports, a decision appears to be needed whether 
the United States should attempt to set an example for the world, or whether 
it should adopt export policies and controls agreeable to other nuclear sup- 
plier nations. If the former approach is chosen, then the United States 
could unilaterally consider such measures as: 

(1) Prohibition of export of the technology, plant and equipment to pro- 
duce weapons -grade nuclear materials. 

(2) Prohibition of nuclear exports to any nation which will not agree 
to put all its nuclear activities under IAEA safeguards, excluding perhaps 

that already poss< ir weapons. 



11 



CRS-U 

(3) Prohibition of the export of nuclear powerplants for applications 
without economic justification. 

(4) Requirement of a proliferation impact analysis by the Arms Control 
and Disarmament Agency as a prerequisite for major exports. If this ap- 
proach is chosen, then the United States would focus its efforts on persuading 
the nuclear supplier nations to adopt its position, and limit unilateral actions 
that could reduce the U. S. position in the world nuclear market. 

Strengthening the International Atomic Energy Agency . --Some kind of 
international safeguards appears necessary to deter diversion of nuclear 
materials from civil power use by high risk of detection. Despite its limi- 
tations, the IAEA exists and is accepted by virtually all nations. Many 
measures can be proposed to strengthen the IAEA and to improve its safe- 
guards system and technologies. However, before individual measures can 
be considered, it is necessary for the United States to decide the answers 
to several key policy questions: What does the United States really expect 
from the Agency? How far is it willing to support the IAEA diplomatically 
and financially? Would the United States yield some sovereign powers to 
the Agency as an example to other nations? What are the prospects of per- 
suading other IAEA members to support our ideas ? 

As mentioned earlier, it seems incongruous on one hand for prolifer- 
ation to be described as the foremost long-term problem of these times, 
and on the other hand, to see member nations of the IAEA haggling over 
whether 40 inspectors are enough to safeguard the world use of nuclear 
power and who should pay for the costs of safeguards. 

The whole subject of ways to strengthen the IAEA and its functions 
merits further attention. 



12 



CRS-12 



n. HEARINGS OF THE SUBCOMMITTEE OX ENERGY 
AND THE ENVIRONMENT 



On July 21, 1975, the Subcommittee on Energy and the Environment 
opened three days of hearings on the proliferation of nuclear technology, * 
a subject which Chairman Morris K. Udall characterized as perhaps the 
ultimate question facing civilization: Can we as a people survive the nuclear 
age? The Subcommittee had laid the groundwork for these hearings in its 
earlier hearings of April and May 1975 that provided an overview of major 
issues of nuclear energy. ** 
The Problem of Proliferation 

Briefly put, the problems of the proliferation of nuclear weapons and the 
industrial ability to make them, and the prospects --small though they now 
appear--for terrorist or extremist use of nuclear explosives, appear as 
a grave new risk to threaten world peace and society. If more nations, 
or irresponsible groups, or perhaps irresponsible or unstable individuals, 
come into the possession of nuclear weapons, prospects for world peace 
will become increasingly unstable. Some analysts fear that use of nuclear 
weapons by smaller nations could trigger a general nuclear war of the 

* U.S. Congress. House. Committee on Interior and Insular Affairs, Sub- 
committee on Energy and Environment. Hearings. Oversight Hearings on 
Nuclear Energy- -International Proliferation of Nuclear Technology. 94th 
Cong., 1st sess., July 21, 22 and 24, 1975, Part III, 118 p. Hereafter 
referred to as the July hearings. 

** U.S. Congress. House. Committee on Interior and Insular Affairs, Sub- 
committee on Energy and the Environment. Hearings. Oversight Hearings 

lclear Energy- -Overview of the Major Issues. 94th Cong. , 1st EM 
April 28, 29; May 1 and 2, 1975, Part I, 901 p. Hereafter referred to 
as the April-May hearings. 



13 



CRS-13 

kind speculated about by Herman Kahn in the 1960s* or substantial and un- 
predictable shifts in world balances of power that could result from a li- 
mited use of nuclear weapons between known or unknown adversaries. The 
consensus holds that further weapons proliferation can produce intolerable 
tensions among nations. Thus measures are urgently required to prevent 
if possible, or at least to slow down further proliferation until the world 
can devise the institutions needed to live with nuclear explosive materials 
in reasonable safety, or a practicable substitute for nuclear power can be 
developed and applied. 
Background of the Hearings 

The hearings were held at a time when ominous developments in the 
proliferation of nuclear technology were causing renewed concern in Con- 
gress and in the executive branch. To date, one nation has used nuclear 
weapons --the United States. Four more have tested nuclear weapons -- 
the Soviet Union, the United Kingdom, France and China. Most recently, 
India (in May 1974) tested a nuclear explosive which it insists was designed 
for peaceful purposes. The anticipated acceleration in the production and 
use of nuclear fuel materials and associated facilities for civil purposes 
during the 1980s and beyond can greatly increase the probability that more 

* In 1962 Herman Kahn published his Thinking about the Unthinkable . (New 
York: Horizon Press, 1962, 254 p.) In it he made the case for hard thinking 
about the realities of thermonuclear war. "We must at least ask ourselves, " 
he wrote, "What are the likely and unlikely results of an inadvertent war, 
the possibilities of accident, irresponsibility, or unauthorized behavior on 
the other side as well as on our own?" His analysis then focussed upon 
the possibilities of nuclear war between the United States and the Soviet 
Union. Proliferation will greatly expand the problem by introducing new and 
perhaps less stable participants. 



14 



CRS-14 

countries will produce nuclear weapons or acquire the industrial base to 
make them quickly. Increased also will be the number and location of places 
where dissident groups could try to steal nuclear materials or sabotage nu- 
clear facilities. To counter and limit the risks of further nuclear prolifer- 
ation, the United States and other nations have entered into a Non- Prolifer- 
ation Treaty (NPT). However, some analysts fear that countries which have 
not signed the NPT could acquire the necessary materials and technology 
for nuclear weapons, and that NPT countries could abrogate their commit- 
ments after they have acquired nuclear materials and facilities useful for 
the production of nuclear weapons. 

Chairman Udall noted that as the Subcommittee prepared for the hear- 
ings on proliferation, it became clear that what is required is the strongest 
possible international pressure to guarantee that no nation can use a newly 
acquired nuclear technology to create nuclear weapons. Also of utmost im- 
portance are strict international controls, or safeguards, to prevent nuclear 
materials capable of being used in a nuclear explosive from being diverted 
by governments or stolen by terrorists. Critical to prospects of future pro- 
liferation are national and international policies and controls for export 
of certain nuclear products and technology. 

As a major world supplier of nuclear technology, it would seem 
desirable for the United States to take the lead in insisting on stringent 
conditions and enforceable safeguards on the international sale of nuclear 
components and materials. However, the responsibility for devising and 



15 



CRS-15 

implementing current U.S. nuclear export policies is divided among several 
agencies. The United States through its foreign policy can play a major 
role in formulating new international policies to effectively limit prolifer- 
ation of nuclear weapons by States that now do not have them. In opening 
the hearings, Chairman Udall identified four major options for the United 
States for improving international safeguards and controls over exports of 
nuclear materials, facilities and technologies. He said: 

First, this Nation should seek to strengthen the IAEA to insure 
that its safeguards function is adequately carried out. 

Second, the United States should cooperate with other exporting 
states in obtaining strict safeguard agreements from all receiving 
states. Common problems of reactor safety and radioactive waste 
disposal should also be addressed on an international basis. 

Third, the possibility of placing enrichment and reprocessing 
facilities under international control in regional centers should 
receive serious early consideration. Exporting nations should 
seek ways to guarantee adequate supplies of nuclear fuel so as 
to discourage other nations from developing such facilities. 

Fourth, I believe that the United States should concentrate on a 
long-range energy policy which would allow all nations to develop 
safe alternative energy sources in the hope that nuclear fission 
needs only be an interim solution to the world electrical energy 
needs. 

Purpose of the Hearings 

The hearings were planned to obtain information and insight from Fed- 
eral agencies and from the nuclear industry about the international frame- 
work in which nuclear exports take place, the policies and processes for 
U.S. export controls, and the technological and foreign policy challenges of 
these exports for control of nuclear weapons proliferation. Special atten- 
tion was given to the adequacy of safeguards of the International Atomic 



16 



CRS-16 

Energy Agency (IAEA), and to procedures for commercial contracts and 
government licenses for exports. 
Organization of the Hearings 

The Subcommittee invited testimony for its April- May 1975 hearings 
from three Federal officials, a corporate officer of a major nuclear com- 
pany, a leading analyst and critic of U.S. safeguards policies and programs, 
and a leading analyst of U.S. arms control and disarmament programs. 
In order of appearance, the witnesses and the main subjects they addressed 
were as follows: 

Mr. Myron B. Kratzer, Acting Assistant Secretary of State for 
Oceans and International Environmental and Scientific Affairs, 
U.S. Department of State, on the background and rationale for 
U.S. international cooperation in nuclear energy. 

Dr. Abraham S. Friedman, Director, Division of International 
Programs, U.S. Energy Research and Development Administra- 
tion, on the general framework in which U. S. activities for inter- 
national cooperation in nuclear matters are carried out, and an 
overview of U.S. and foreign exports of materials andequipmc; 

Dr. Victor Gilinsky, Commissioner, U.S. Nuclear Regulatory 
Commission, on licensing of exports of nuclear materials and 
facilities. 

Mr. A.L. Bethel, Vice President and General Manager, Water 
Reactor Division, Westinghouse Electric Corp. , on the company's 
role as a manufacturer of nuclear power equipment. 

Dr. Theodore B. Taylor, Chairman of the International Re- 
search and Technology Division of General Research Corp. , on 
possible technological and policy solutions to nuclear prolr 
ation.** 



* Dr. Friedman is now a U.S. science attache for the State Department 
in Mexico. 

** Dr. Taylor is now an independent consultant. 



17 



CRS-17 



Dr. Herbert Scoville, Jr. , former Assistant Director for Sci- 
ence and Technology of the Arms Control and Disarmament 
Agency, on control of nuclear technology. 

In the Subcommittee's July 1975 hearings, it heard testimony from 

seven witnesses who included a ranking Federal official, four scientists or 

scholars from leading universities, a nuclear weapons expert and the 

counsel for a public interest group. The witnesses were: 

Professor Hans A. Bethe, Professor of Physics, Cornell Uni- 
versity, on the hazards of diversion of plutonium and of nuclear 
accidents. 

Ms. Anne Hessing Cahn, a research fellow of the Harvard Uni- 
versity program of Science and Technology, on what the United 
States could and should be doing to establish international incen- 
tives for countries not to pursue the nuclear weapons option, or 
to limit or delay their capabilities to do so. 

Dr. Victor Gilinsky, Commissioner, U.S. Nuclear Regulatory 
Commission, on safeguarding nuclear materials. 

Professor Wolfgang K. H. Panofsky, Professor of Physics at 
Stanford University, on the potential applications of so-called 
peaceful nuclear explosives, their limitations and their implica- 
tions for further proliferation. 

J. G. Speth, Esq. , representing the Natural Resources Defense 
Council, on the NRDC's analysis of the prospects for nuclear theft 
and diversion to weapons, the adequacy of safeguards and why the 
Council would ban the use of plutonium. 

Dr. Theodore B. Taylor, on the risks and benefits associated 
with the further development of nuclear power, with special at- 
tention to the risks of theft or diversion of nuclear materials and 
the prospects that safeguards could reduce these risks. 

Professor Mason Willrich, of the University of Virginia, on 
legal aspects of arms control, disarmament and safeguards, and 
the regulation of international nuclear commerce. 



18 

CRS-18 

III. THE CHALLENGE OF NUCLEAR PROLIFERATION 

In three brief decades, civilian nuclear power has grown from specu- 
lation of scientists and engineers engaged in making atom bombs for the 
United States into a demonstrated technology in use in major industrial na- 
tions and on the brink of expansion into many developing nations. Civilian 
nuclear power, despite questions of safety, costs and uranium supply, 
appears to promise to many nations some relief and independence from in- 
creasingly expensive supplies of oil from potentially unreliable sources. So 
there are prospects for a revived international market for nuclear exports 
by the leading industrial nations and growing competition to sell nuclear 
power plants and associated fuels and services. United States' interest in 
this market is keen because of cancellations and delays of nuclear projects 
on the domestic front and dim prospects for new sales of nuclear power- 
plants for the present. The prospects for income and employment for nuclear 
exporting countries and a happier energy situation for nuclear importing na- 
tions are attractive indeed. Yet these prospects are overshadowed by a 
growing concomitant danger, a growing risk that more nations will become 
able to make nuclear weapons and that they may do so. The spread of nu- 
clear powerplants alone is not of great proliferation concern. Rather, it 
is the spread of the industrial nuclear base, the ability to produce weapons- 
quality materials. Herein lies the risk of nuclear attack by one nation upon 
another, or of worldwide nuclear war if the United States and the S< 
Union were to be dragged in, and the risk of it groups stealing 



19 



CRS-19 

nuclear materials to make into crude atomic bombs or other destructive 
devices. A growing challenge of the mid-1970s is to find ways to limit 
further spread of the ability to make nuclear weapons and its attendant risks. 
How this can be done is a matter that has become important to the Congress 
as well as to the Administration. As seen by Dr. Theodore B. Taylor, 
the most critical task facing the world is to establish, within a very few 
years, worldwide controls that will reduce the risks of nuclear explosives 
to acceptable levels.* 

In principal there are three broad, divergent approaches to limiting or 
stopping proliferation. They are to attempt to: 

(1) Stop and suppress use of nuclear power, or 

(2) Freeze world nuclear power at present levels, or 

(3) Limit further proliferation, permit continued growth of civilian nu- 
clear energy in the world under improved safeguards and measures to re- 
duce pressure for proliferation. 

In today's world energy circumstances and considering that the United 
States has lost much of its nuclear monopoly, the first two approaches imply 
a substitute for civilian nuclear energy, a substitute independent of world 
oil supplies and sufficiently demonstrated and established to permit im- 
mediate large-scale use. No such substitute now exists. Perhaps the 
world's scientists, engineers and industrialists can produce an alternative 
within a few decades. But meanwhile, civilian nuclear power seems likely 

* July hearings, p. 73. 



20 



CRS-20 

to grow and spread, at least until a catastrophic accident or misuse of 
nuclear materials causes the world community to decide that the risks of 
civil nuclear power outweigh its benefits. The third approach implies the 
world can learn to live with some proliferation until it finds a long-term 
solution. The world is already far down the road of nuclear power and 
is close to the point of no return. The next few years will provide a last 
chance to deal with nuclear power and the risk of proliferation. 
The Status of Proliferation 

Today five countries — the United States, the Soviet Union, Great Britain, 
France and the People's Republic of China- -have developed and tested nu- 
clear weapons. Of these, all but China have substantial civilian nuclear 
power industries. An additional country, India, has tested a nuclear ex- 
plosive which it describes as a peaceful device. On the other hand, as seen 
by the Administration, the acquisition of nuclear weapons and nuclear ex- 
plosives capability have been impressively limited. * 

The Administration attributes this situation in large measure to U.S. 
policies and active U.S. leadership directed toward avoiding the develop- 
ment of national capabilities to acquire nuclear weapons.** Secretary 
Kissinger in his speech of September 23, 1974, to the United Nations 
Gpneral Assembly emphasized this goal when he said, in part: 

In a world where many nations possess nuclear weapons, dan- 
gers would be vastly expanded. .. The challenge before the world 

* Statement by Myron B. Kratzer, Department of State, July hearings, p. 3. 
** Ibid. 



21 



CRS-21 

is to realize the peaceful benefits of nuclear technology without 
contributing to the growth of nuclear weapons or the number of 
states possessing them. * 

The State Department acknowledges that the risk of further proliferation 
seems greater and more immediate than at any time in the past. Yet it 
sees in the experience of the last two decades the lesson that proliferation 
is not inevitable and can be avoided.** 

Other observers are not as optimistic. Physicist Bernard T. Feld noted 
it is all too easy to conclude that we have already passed the point of no 
return for nuclear proliferation. He is not yet ready to pronounce non- 
proliferation dead, but warned there is little time left and that there may 
still be some ways of frustrating the apparently inevitable if we can concen- 
trate our collective intellectual and political efforts on the problems.*** 

Commissioner Victor Gilinsky of the Nuclear Regulatory Commission 
expressed his concern at the hearings that the advance of civilian nuclear 
power programs throughout the world will bring increasing numbers of coun- 
tries technologically closer to the nuclear weapons threshold. For three 
decades there have been warnings of nuclear proliferation. Now, in his 
view, "uncontrollable nuclear proliferation threatens to become a reality. " 

* July hearings, p. 3. 

** Ibid . , p. 9. 

*** Cf . , Bernard T. Feld. Nuclear proliferation- -thirty years after Hiro- 
shima. Reprinted in the July hearings, p. 104. 



70-303 o 



22 



CRS-22 

The measures taken over the years to prevent or at least contain prolifer- 
ation apparently have not been enough. * 

Dr. Theodore B. Taylor summed up the central issue of proliferation 
in terms of npgating the pressures for proliferation:** 

Thp central issue that must be faced and acted on, I believe, 
is this: How can all countries that do not now have nuclear 
weapons be convinced that they will be less secure if they do so 
as long as five and perhaps six, large countries all behave as 
though they feel more secure with large numbers of nuclear wea- 
pons than without them? Until this issue is dealt with honestly 
and openly, undiluted by rhetoric, I am convinced that the pres- 
sures to proliferate will continue to increase, as will the dangers 
of outbreak of nuclear war. 

Dr. Taylor saw real possibilities for technological measures to the 
problem of keeping nuclear weapons out of the hands of terrorists and cri- 
minals, but not for keeping them out of the hands of governments that really 
want them for military purposes.*** 
Mechanisms of Proliferation 

A fundamental fact for limiting nuclear proliferation for the 1970s and 
beyond is that almost any nation with funds and some industrial capability 
can make its own nuclear materials and fashion them into useful, even though 
not the most efficient or powerful, nuclear weapons. 

Dr. Taylor identified at least nine ways in which a country could acquire 
materials for fission-type atom bombs. These drive home the point that 

* July hearings, p. 48. 
p. 76. 
[bid. 



23 



CRS-23 

there is a variety of ways to acquire the nuclear materials for weapons. 
Table I gives the details. Dr. Taylor put it bluntly: "Any country that really 
wants nuclear weapons during the next few decades will be able to acquire 
them, one way or another. "* 

A recently noted dimension of proliferation is the risk that non-national 
organizations might covertly divert or openly steal weapons-grade materials 
from civilian or military nuclear fuel cycles to make their own crude ex- 
plosive or radiological devices. This risk is of special concern to the Sub- 
committee because nuclear threats by terrorists, for example, are unlikely 
to be deterred by a threat of nuclear retaliation and because physical se- 
curity for such materials in the United States and in other countries is not 
yet adequate to prevent theft from all places where substantial quantities 
of weapons-grade materials exist.** 
Troublesome Cases 

Most countries do not have nuclear weapons and the greater part of 
these do not appear to be under pressure to acquire them. The industrial 
nations of Europe that now lack weapons seem uninclined to seek them. 
Rather, the greatest risk of further proliferation lies with a number of 
developing or smaller countries. Five cases of special interest to the Sub- 
committee were Brazil, Egypt, Iran, and Israel. 

* Ibid . , p. 75. 

** Dr. Taylor made this assessment for the Subcommittee. Ibid. 



24 



CRS-24 



Table I 



SOME OPTIONS FOR A COUNTRY TO OBTAIN 
NUCLEAR MATERIALS FOR WEAPONS 



1. Build its own uranium enrichment facility 

2. Build a plutonium production reactor using natural uranium for fuel with 
heavy water, carbon or beryllium as a moderator 

3. Build a neutron generator to transfor uranium into plutonium 

4. Build a reactor that uses imported fuel and divert some fresh fuel if 
not effectively safeguarded. If the reactor is not effectively safeguarded, 
extract fissionable materials from used fuels 



5. Obtain a reactor or assistance in building one and exercise option 4, 
above 



6. Import a reactor and fuel and, if effectively safeguarded, later abrogate 
the supply agreement with its safeguards 

7. Arrange for theft of weapons-grade materials from a country where phy- 
sical security for nuclear materials is inadequate 

8. Arrange for theft of weapons-grade materials from facilities within the 
country and subject to safeguards so that the theft appears to be the 
work of others 



9. Arrange for theft of complete nuclear weapons from another country 



Sour< ment of Dr. Theodore B. Taylor, July hearings, p. 74, 



25 



CRS-25 

Brazil. --The recent agreement by West Germany to supply Brazil with 
nuclear powerplants plus a complete nuclear fuel cycle has aroused con- 
siderable concern. Since Brazil has not ratified the Non-Proliferation 
Treaty, it has no treaty commitment not to make nuclear weapons, or to 
place all of its nuclear activities under IAEA safeguards. Brazil is party 
to agreements with the Government of West Germany and with the IAEA 
which commit it not to use the German nuclear exports for weapons or other 
military purposes. The United States, according to the State Department, 
made strong representations against the agreement to export fuel repro- 
cessing and enrichment technology, but without success. In terms of poten- 
tial weapons proliferation, it would have been better if this deal had not 
been made, or if the West German Government had insisted Brazil ratify 
the NPT or at least agree to put all nuclear materials and facilities in Brazil 
under IAEA safeguards. However, the agreement does have some interesting 
and valuable safeguards arrangements. It requires Brazil to submit tech- 
nological know-how to IAEA safeguards as well as all nuclear equipment, 
installations and materials supplied. This is the first attempt to safeguard 
technological know-how.* 

Egypt . --Of particular interest to Congress is the pending agreement of 
cooperation with Egypt, which originated in the proposal of President Nixon 
to supply both Israel and Egypt with nuclear powerplants as one inducement 
for them to end their hostilities. 

* July hearings, p. 78. 



26 



CRS-26 

On November 5, 1975, Secretary of State Kissinger and Egyptian De- 
puty Prime Minister Fahmy agreed in principle to conduct a program of 
cooperation in peaceful uses of atomic energy. The joint statement notes 
that Egypt will be able to purchase from the United States nuclear power 
reactors with an electrical generating capacity of 1200 megawatts and also 
the slightly enriched uranium to fuel these plants. This cooperation is to be 
under terms of an agreement for nuclear cooperation which will be: "fully 
compatible with the non-proliferation objectives of the two Governments. " 
The conditions of the agreement will be designed to assure that U. S. - 
supplied facilities, materials, and their products, as well as the associated 
relevant technology, are used for peaceful purposes only. It is to include 
provisions to ensure that:* 

a. None of the assistance provided will be employed for any mili- 
tary purposes, including the manufacture of any nuclear explosive 
device. 

b. The materials and facilities to be supplied as well as the produced 
plutonium will be subjected to international safeguards, adminis- 
tered by the International Atomic Energy Agency, designed to as- 
sure their continued uses for peaceful purposes. 

c. The plutonium produced in the agreed-upon 1200 MWe power re- 
actors under the agreement, or derived from U.S. fuel supplied 
for these facilities will be reprocessed, fabricated and stored out- 
side Egypt. 

d. Facilities utilizing relevant nuclear technology obtained from the 

Lted States will be under effective safeguards. 

e. The Government of Egypt guarantees to apply effective physical 
security measures to the facilities and nuclear material covered 
by the agreement. 

* Department of State release no. 533, November 4, 1975. The release 
includes the text of the joint statement. 



27 



CRS-27 

The statement also specified that the same safeguards will be applied in 
and agreement for nuclear cooperation between the U.S. and Israel. 

Israel. --One nation of scientific and technological strength which has yet 
to test nuclear weapons but which some analysts see as able to quickly 
acquire weapons is Israel. During the hearings witnesses were asked about 
evidence whether Israel has nuclear weapons. The Administration witnesses 
said they had no evidence that this was so, and that they had evidence Israel 
had never tested a nuclear weapon. They acknowledged that Israel built 
a reactor in an isolated part of the country, the Damona reactor, which 
for some time was kept in a very confidential status. This reactor was 
not supplied by the United States and is not subject to any international in- 
spection or control. * The State Department suggests the existence of this 
reactor leads to the frequent speculation that it may have been used to 
produce materials for nuclear explosives. The witness from industry had 
no evidence one way or another, but agreed that Israel could develop a 
weapon without outside assistance. The frankest answers came from Dr. 
Scoville and Dr. Taylor. The former noted that while he was confident 
the United States would know if Israel had tested a weapon, for a first gen- 
eration weapon, or a simple one, no test is necessary. He suspected that 
Israel is at the point where it has all the parts for a weapon but may never 
put them together. ** 

* Cf . , statements of M. Kratzer, Department of State, in July hearings, p. 
19, and A. Friedman, ERDA, ibid . , p. 38. 

** July hearings, p. 92. It was reported that senior officials of the Central 
Intelligence Agency estimate that Israel has 10 to 20 nuclear weapons ready 
for use. Cf . , Kranish, Arthur, Washington Post, March 15, 1976: A2. 



28 



CRS-28 

Dr. Taylor estimated that the Damona reactor might produce about a 
dozen kilograms of plutonium a year if run at maximum output, which 
could give the Israeli Government a small stockpile of plutonium. Reflecting 
upon his experience in weapons design and upon the high quality of the Is- 
raeli physicists and engineers. He thought there might be a very good 
possibility the Israelis have become very sophisticated in the development 
of weapons that require small amounts of plutonium, without giving any 
inkling of what is going on. * 
Peaceful Nuclear Explosives 

The notion that there can be "peaceful nuclear explosives'' (PNEs) is 
another factor in the proliferation of nuclear weapons. By labelling its 
explosive device as "peaceful", the Indian Government sought to avoid some 
of the opprobrium of testing nuclear weapons. Clearly, the explosive force 
of fissioning uranium and plutonium is amoral and its physical and environ- 
mental effects do not depend on the intentions of the person who triggers 
the device. Any nation which can make a peaceful nuclear explosive has 
a nuclear weapon in hand. So the development of PNE devices by non- 
weapons nations is just as much to be avoided as the direct, uncamouflaged 
development of weapons themselves. 

Nonetheless, there is a plausibility for PNEs that has made their po- 
tential use a matter of interest in some countries.* This interest is sup- 
ported in Article V of the Non Proliferation Treaty which obligates all Par- 
tips to make available the potential benefits of PNEs on a non-discriminatory 



29 



CRS-29 

basis to non-nuclear nations.* Professor Panofsky warned that this clause 
has been misinterpreted by PNE proponents to constitute a positive mandate 
to expand PNE activities. Both from the history of the treaty and its formal 
interpretation, he concludes that the commitment under the treaty is only 
to share equitably economic benefits of PNEs, if any, with non-nuclear na- 
tions. It is in no way a positive obligation toward developing new PNE op- 
portunities. ** 

Moreover, it is by no means clear that use of PNEs could be compatible 
with the attainment of a comprehensive nuclear test ban (CTBT) that since 
1963 has been a publicly quoted policy objective of all U.S administrations, 
provided a test ban can be adequately verified. This is exactly the prob- 
lem now being tackled by U.S and Soviet negotiators in relation to the 1974 
Threshold Test Ban Treaty. It appears most difficult, perhaps impossible, 
to design a comprehensive test ban which would not not also prohibit PNEs 
outright. Nuclear weapons tests serve several purposes: 

1. Development of new military explosive devices. 

2. Verification and proof testing of weapons from stockpiles. 



* Dr. Panofsky listed six frequently considered applications of PNEs, none 
of which have reached the stage of practical use: (1) Retorting oil shale 
in situ after having fractured underground oil shale deposits by PNEs; 
JZ) creating underground storage cavities; (3) the stimulation of flow of 
natural gas bound in "tight" gas formations; (4) the fracturing of copper 
and other ores in situ for extraction by leaching; (5) the generation of elec- 
tricity from heaF released underground by a PNE and/ or by recovering under- 
ground geothermal heat over a contact area enlarged by PNEs; (6) excava- 
tion of large engineering projects such as canals, harbors, etc. Cf. , April- 
May hearings, p. 727. 

** Ibid. . p. 731. 



30 



CRS-30 

3. Tests to show the effect of nuclear weapons on systems of military 
interest. 

It is not clear how a comprehensive nuclear test ban treaty can be de- 
signed to permit peaceful nuclear explosions without at the same time opening 
a loophole for camouflaged development of weapons. 

Considering the testimony heard by the Subcommittee on the use of 
peaceful nuclear explosives and their relation to proliferation, it appears 
that substantial reasons exist to find alternatives to PNEs for use by non- 
weapons countries and to discourage their use by any nation. 



31 



CRS-31 

IV. DOMESTIC NUCLEAR SAFEGUARDS 

The U.S. civilian nuclear industry operates within a framework of regu- 
lations to detect and to prevent theft of nuclear materials. Collectively, 
these measures constitute the safeguards systems for licensed facilities and 
materials. These requirements interact with and influence possible limi- 
tations and requirements imposed upon U.S. nuclear exporters. Domestic 
safeguards will be briefly described in this section as background for ana- 
lysis of export controls in the next. 
Dimensions of the U.S. Safeguards Problem 

The dimensions of the U.S. safeguards problem are determined by the 
quantity of licensed nuclear materials held by the nuclear industry. In fiscal 
year 1975, 28 facilities held licenses to possess more than one kilogram 
of enriched uranium or plutonium and 74 shipments were made of privately 
owned materials involving about 2,000 kilograms. By 1980 the Nuclear 
Regulatory Commission expects the annual number of shipments to doublp 
and to include about five times as much materials. If commercial use of 
plutonium comes to pass, NRC anticipates that by the end of the century 
as much as 300, 000 kilograms of this material would be flowing through 
the nuclear industry. According to the NRC, "This increased flow and the 
resulting increase in stock of SNM, would substantially alter the nature of 
our safeguards problem from that which exists today. "* 

* U.S. Congress. Joint Committee on Atomic Energy. Hearings. Nuclear 
Regulatory Commission Authorizing Legislation, Fiscal Year 1976. 94th 
Cong., lstsess., March 19, 1975, p. 201. 



32 



CRS-32 

Licensing of Nuclear Materials 

The first line of defense in the U.S. system for keeping nuclear ma- 
terials out of the hands of people who should not have thorn is the statutory 
prohibition against possession or use of such mater, pt as licensed 

by the Nuclear Regulatory Commission. In addition n 57(c) of the 

Atomic Energy Act of 1954 as amended specifies that the NRC shall not 
distribute any nuclear materials or issue a lie enri< hod uranium 

or plutonium to any person within the United States if the Commission finds 
that the distribution of such material or the issuance i license would 

be inimical to the common defense and securi" onstitute an un- 

reasonable risk to the health and safety of th Based upon this sta- 

tutory authority, the AEC and now the NRC have issued guides and regu- 
lations providing for safeguards measures to h followed by those persons 
licensed to have and to use nuclear materials. 
Safeguards and Physical Security 

The nuclear age has created new words and brought now meaning to old 
ones. The word "safeguards" is one that now and in the future must rank 
in importance with "fission" and "uranium". "Safeguards" refers to ways and 
means to assure prompt detection of attempted or actual theft or diversion 
of nuclear materials, and to reduce access to nuclear materials through use 
of barriers and containment. Recently "safeguards" as used in the United 
States has boon expanded to include the use of guards and other measures of 
physical security to protect against armed robbery. Within the United 
:s of nuclear materials are responsible for their safeguarding 
under terms of id regulations of the Nuclear Regulatory 



33 



CRS-33 

Commission.* The NRC itself is well aware of the emphasis upon safeguards 
explicit in the language and legislative history of the Energy Reorganization 
Act of 1974, which took the regulatory functions of the old AEC and assigned 
them to the new NRC. According to NRC Commissioner Gilinsky, nuclear 
powerplants do not pose a serious problem of nuclear theft, and so NRC 
is placing special emphasis on the safeguarding of industrial plants that 
handle plutonium and highly enriched uranium and on safeguarding nuclear 
materials in transit. NRC is relying in part on enhanced physical security 
to compensate for deficiencies that it acknowledges in current nuclear ma- 
terials accountability systems."" On the other hand, the NRC is still rather 
silent on controlling the risks of deliberate sabotage of nuclear powerplants 
and nuclear fuel facilities to cause a dangerous release of radioactive ma- 
terials. The modern world of terror seems to be making a slow impression 
upon fundamental concepts of safeguards, a condition that causes some 
concern. 

Safeguards systems in the United States include physical protection of 
facilities, material accountability systems to keep track of nuclear mate- 
rials, and transportation security. 

Physical protection at installations containing nuclear materials are 
specified by the NRC. During 1974 the Commission required new protective 

* Commissioner Gilinsky of the Nuclear Regulatory Commission uses the 
term "safeguarding" to mean those measures employed to protect nuclear 
materials against theft. Such protective measures include both physical 
protection, such as fences and guards, and measuring and accounting for 
nuclear materials. Cf. April-May hearings, p. 758. 

** April-May hearings, p. 759. 



34 



CRS-34 

measures at all 19 facilities licensed to hold four or more pounds of pluto- 
nium or 11 pounds of highly enriched uranium.* Each licensee is now re- 
quired to: 

(1) Maintain an armed on-site security organization; 

(2) Protect nuclear materials by a system of two barriers, typically 
fences and walls, the outermost to b^ lighted and alarmed; 

(3) Provide a system of rigorous facility access control; 

(4) Provide a system of radio communication between guards and be- 
tween the facility and a nearby local law enforcement agency; and 

(5) Establish arrangement for quick response of local law enforcement 
agencies when needed. 

Control and accounting for nuclear materials at licensed plants also 
have been recently revised and tightened by the NRC. Licensees are now 
required to maintain and follow written material control and account- 
ability procedures to trace in detail the movements of the materials in 
their facility. The licensee must conduct bi-monthly inventories of plu- 
tonium and highly enriched uranium and maintain a record of each inven- 
tory discrepancy, or MUF (material unaccounted for. ) The discrepancy 
is the difference between material expected to be present on the basis of 
records and the amount actually measured. These differences are expected 
to be less than 0. 5 percent of the material passing through the plant betw.-on 
inventor. 



amounts are lower than the minimum amounts needed for 
pie nuclear weapons. 



35 



CRS-35 

Transportation of nuclear materials is also regulated by the NRC. The 
regulations, which were recently revised, apply to shipment by road, rail, 
air or sea. The NRC regulations require: 

(1) suitable escort, or for air shipment, monitoring of loading and un- 
loading of aircraft; 

(2) improved communication between the escort or monitor and the li- 
censee; and 

(3) tracing any shipment that may fail to arrive and immediate notifi- 
cation of the NRC. 

The increased safeguards requirements are, however, but one step to- 
ward the additional safeguard measures that will be required as the volume 
of nuclear materials grows in industry, as the technical complexities of nu- 
clear facilities increase, and as the social and political environment 
changes. The NRC itself noted for us several opportunities to further 
strengthen safeguards by:* 

(1) increased physical security through more effective devices, bar- 
riers, guards; 

(2) tighter material accountability systems through more frequent and 
accurate inventories; 

(3) installation of "real time" monitoring systems; and 

(4) strengthened transportation security through more secure vehicles, 
better communications and guards. 

* April-May hearings, p. 760. 



36 



CRS-36 

The NRC has underway three studies designed to investigate various 
aspects of the safeguards problems as well as to provide some potential 
solutions. These three include the study of a possible security agency within 
the NRC as required by Congress in the Energy Reorganization Act, a sur- 
vey of nuclear energy center sites dealing with possible colocation of nuclear 
facilities to reduce risks and increase effectiveness of safeguards, and a 
special safeguards study. 

The NRC acknowledges that all risks cannot be eliminated. So it opts 
for a graduated safeguards system as the most efficient approach, one 
which varies the intensity of the safeguards to the degree of risk of theft or 
diversion. NRC gives primary attention to nuclear materials during the 
period from when the fuel leaves an ERDA enrichment plant until it enters 
the reactor. Within a few years this attention will also have to include nu- 
clear materials recovered at licensed commercial fuel reprocessing plants. 
At present none of the commercially built fuel reprocessing plants in the 
United States is operating, and it is unlikely that any one of them will be in 
full operation for some years to come. 

Another factor is economics. Obviously the effectiveness of safeguards 
depends upon the time and effort assigned to them. But that time and effort 
costs money, and from the standpoint of power economics, safeguards costs 
are non-productive and serve only to increase the cost of nuclear power. 
So there is a continual basis for conflicting objectives, between the goal of 
maximum safeguards to protect the public and national safety, and the goal 
of minimum cost of electricity for the benefit of individual, corporate and 
other organizational users. 



J 



37 



CRS-37 

The Adequacy of Safeguards 

Whether or not domestic safeguards can perform adequately is a matter 
of controversy in which the disputants have become polarized. The nuclear 
industry and the Nuclear Regulatory Commission, while agreeing that zero 
risk is not attainable, argue that the risk is slight in comparison with bene- 
fits of civil nuclear power at home and abroad and is endurable by our 
society. Environmentalist and other public interest groups advise that the 
potential consequences --death and destruction- -from a successful, although 
improbable, theft or diversion are so terrible that society should not have 
to bear them and that the use of nuclear power therefore should be banned 
or drastically reduced. Advocates of this position expect that whatever 
energy and electrical supplies are lost through such action can be quickly 
offset by immediate large scale use of solar energy; by severe, govern- 
ment-enforced conservation of energy; by curtailed use of electricity; 
and by greatly increased use of coal. Advocates of a nuclear moratorium 
also believe that even if a safeguards system could be made sufficiently ef- 
fective, the social cost of such a system, in terms of loss of civil liberties, 
is repugnant to the American tradition and is unacceptable. Proponents of 
commercial nuclear power see effective safeguards systems as no more 
onerous a burden to society than other systems now in use to protect infor- 
mation or facilities, or valuable commodities. 

Since much of the previous discussion has presumed effective safe- 
guards, it is appropriate here to recall some views of Natural Resources 
Defense Council which is one of the active critics of nuclear energy. 



70-303 O 



38 



CRS-38 

Summing up the dilemma of nuclear energy and its opposition to a nu- 
clear future, NRDC said:* 

Th^se dilemmas raise the question of whether plutonium is 
simply too dangerous for commercial application. A basic ques- 
tion is whether we want to entrust so demanding and unrelenting 
a technology as plutonium-based nuclear power to human insti- 
tutions which are negligent of their responsibilities and to tech- 
nical fixes which are untried and unproven. Reasonable prudence 
dictates that we look elsewhere for our energy and to plutonium 
only as a last and desperate resort. 

Concerning the impact on the U.S society, NRDC anticipated "tremen- 
dous distortions" in our values and social institutions would be required in 
an attempt to live with plutonium. "it may be that in attempting to do the 
impossible—to live with plutonium--we will create the intolerable."* 

Concerning specific social repercussions, NRDC advised that:** 

First, the proliferation of nuclear reactors abroad will in- 
creasingly give rise to demands for international control and 
ownership of spent reactor fuels and, of course, the repro- 
cessing of plutonium from those spent fuels. That private enter- 
prise here or even government enterprise abroad will be pre- 
pared to turn over a major portion of the nuclear industry to 
international control is to be doubted, yet such a move is pro- 
bably essential if nuclear expansion proceeds and a general pro- 
liferation of nuclear weapons is to be avoided. 

A second problem concerns the proposal now under NRC con- 
sideration to build gigantic nuclear parks each containing per- 
haps 40 large reactors and related fuel cycle facilities. What 
will the impacts of such parks be on smaller utilities and on the 
structure of ownership; and management in the utility industry? 
What are the potential political consequences of such mammoth 
concentrations of economic power? 

The most far-reaching of the social implications of plutonium, 
however, is the threat to civil liberties and privacy. Safeguards 

Ibid . , p. 786. 
** Ibid. , p. 788. 



39 



CRS-39 



necessarily involve a large expansion of police powers. Some 
one million persons have been trained in the handling, moving 
and operation of nuclear weapons. The projected growth of the 
nuclear industry would require a second and perhaps much larger 
group of persons--in this case civilians --who would be subjected 
to security clearances and other "precautions" which are com- 
monplace in the military weapons program. . . 

Security and surveillance procedures at best infringe upon the 
privacy of employees, their families and friends. At worst, 
they are the instruments of repression and reprisal. 



Once the full safeguards security apparatus has been un- 
leashed, there is no telling where the process might end. The 
drastic nature of the threat from nuclear terrorism will most 
likely evoke a drastic police response. 

Summarizing its overall objections to nuclear power, to use of plutonium 

and to the implied safeguards required, the NRDC concluded:- 

The United States was the first nation to see the full meaning 
of modern technology and to exploit it. We should also be the 
first to see technology's limits. It is imperative that our society 
develop a capacity for saying no to technologies that are too 
risky and too demeaning. We can no longer assume that each 
new innovation accompanied by financial backing should be per- 
mitted to proceed, even with regulation. Some should simply 
be halted for the reason that their advantages bear no reasonable 
relationship to the possibility of tremendous social harm they 
present. The use of plutonium fuel falls clearly within this ca- 
tegory. The nuclear future projected by its proponents ranks 
with world poverty, overpopulation and resource depletion as one 
of the principal threats to world stability and human survival. 

While the other analysts do not view the nuclear future as darkly as 

does the NRDC and allied organizations, the points that they raise deserve 

consideration. Without doubt the commercial use of nuclear power and the 

control of its attendant risks from accident and theft or sabotage impose 



Ibid. 



40 



CRS-40 

great responsibilities upon human, and thus fallible, institutions. For this 
reason, observers hold that consideration should be given the doubts, re- 
servations, and criticisms of concerned citizens and their organizations. 
Such consideraton is particularly important for ways and means to limit 
proliferation of nuclpar weapons. 
Government Responsibilities for Nuclear Safeguards 

Many Federal, State and local government organizations are presently or 
may become involved with nuclear safeguards. The Nuclear Regulatory 
Commission, of course, is the lead agency for safeguarding of nuclear 
materials and facilities of licensees. Next comes the Energy Research 
and Development Administration, which is independently responsible for 
safeguards of nuclear materials and facilities in the hands of its operating 
contractors. So at the moment ERDA is responsible for safeguarding far 
more enriched uranium and plutonium than is the NRC. The NRC functions 
through licensing, promulgation of regulations and inspection for compliance 
with regulations. The ERDA functions by directing its contractors to take 
specified measures. ERDA and the State Department negotiate agreements 
with their safeguards provisions. NRC licenses export of nuclear materials 
and facilities while ERDA approves export of certain nuclear information 
and technology. 

Looking beyond NRC and ERDA, the responsibilities for gathering in- 
about possible attempts at theft, diversion or sabotage are shared 
by Federal, State and local law enforcement agencies with no formal). 
tabli - .ns of coordination or cooperation. The repelling of an initial 



41 



CRS-41 

overt attack or theft or sabotage is the responsibility of the licensee and 
the local law enforcement agency. The recovery of stolen materials rests 
with the Federal Bureau of Investigation assisted by Emergency Action and 
Coordination Teams of ERDA and the NRC. 

These arrangements, which the Committee may examine in depth later, 
suggest that the many possible roads to prolifpration are all unpatrolled and 
that human problems of local pride, bureaucratic isolationism and unco- 
ordinated planning and action may leave embarrassing gaps or weaknesses 
in defenses against proliferate 

In addressing the adequacy of nuclear safeguards at the hearings, the 
National Resources Defense Council <NRDC) observed widespread agree- 
ment that current safeguards required by the NRC are inadequate and that 
the Commission had cone in its draft environmental statement of 

plutonium recycle: "Where there is substantial disagreement is whether an 
accpptable safeguard scheme can be devised and successfully implemented 
on the required scal<^ and for long period the NRDC's judgment such 

a safeguards system cannot be achieved for several reasons:** 

(1) Unprecedented and a ltiratply. unworkable demands will be placed on 
those who operate the safeguards program which must be essentially infal- 
lible. NRDC noted that Dr. Alvin Weinberg's call for "unaccustomed vigi- 
lance" and "a continuing tradition of meticulous attention to detail" as im- 
plies unattainable conditions for effective safeguards. Accordingly, NRDC 

* April-May hearings, p. 785. 
** Ibid. , pp. 785-6. 



42 



CRS-42 

argued that, because human institutions are far from infallible, losses of 
nuclear materials cannot be prevented. 

(2) U.S. experience with present safeguarding procedures is hardly re- 
assuring. NRDC cites the example of major discrepancies in inventory ac- 
counts and possible losses of weapons grades materials by an AEC con- 
tractor and a GAO report on inadequate physical security at other AEC 
contractors. 

(3) Safeguards measures proposed by NRC have been opposed by the nu- 
clear industry, so much so that industry's response is likely to be inadequate. 



43 



CRS-43 
V. GOVERNMENT CONTROL OF NUCLEAR EXPORTS 

The exports of certain information, and technology, materials, compo- 
nents and facilities for nuclear power are subject to a variety of licenses 
and authorizations by three different Federal departments or agencies, two 
of them directly controlled by the President and one nominally independent 
of that control. Dr. Scoville characterized the present U.S. nuclear export 
policies and organizations as in a state of turmoil. For him, the dissolution 
of the AEC, the transfer of its regulatory functions to the Nuclear Regulatory 
Commission, and the transfer of its other activities to the Energy Research 
and Development Administration have fractionated responsibilities for con- 
trolling nuclear exports. This splitting of responsibilities has led to delays 
in authorizing exports and to uncertainties as to where the basic responsi- 
bilities may lie in a specific case.- 1 '- He proposes greater centralization 
of responsibility within the executive branch and more efficient utilization 
of the expertise of ERDA, together with sufficient checks and balances to 
avoid sacrificing non-proliferation objectives to industrial or foreign policy 
pressures. Tighter congressional controls over agreements for cooperation 
would also help check against possible overenthusiasm by the executive 
branch. ** 

It should be noted that Congress is giving attention to the division of re- 
sponsibilities for control of exports for nuclear powpr technology as well 

* Cf. , statement of Herbert Scoville in July hearings, p. 101. 
** Ibid. , p. 101 



44 



CRS-44 

as for materials and facilities. Proposals now before Congress would fur- 
ther modify respective functions of ERDA, NRC and the Department of Com- 
merce for nuclear exports.- There follows a brief discussion of controls 
over nuclear exports, and recently proposed legislation. 
Commercial Transactions 

In the U.S. economic system, exports of nuclear powerplants, major 
components and technology for such plants and fabricated nuclear fuel are 
made mainly by private companies. Direct Federal action is limited largely 
to exporting enriched uranium, or providing enrichment services to foreign 
customers who then may export the enriched uranium directly or indirectly 
in U.S fabricated nuclear fuel elements. The commercial exports are made 
within the framework of U.S. agreements for cooperation which the Depart- 
ment of State and the Energy Research and Development Administration ne- 
gotiate with foreign governments. The authority for these agreements is 
Section 123 of the Atomic Energy Act of 1954. U.S. companies can also 
export technology by supplying information and reports, by licensing ar- 
rangements, or by joint ventures or through foreign subsidiaries. It is a 
U.S nuclear company, not ERDA or NRC, that signs a contract with a 
foreign counterpart, or a foreign utility, or some foreign government or- 
ganization. Within the terms of export licenses or other approvals, it is 
the responsibility of the private company to perform, not of the Government. 



The Senate Committee on Government Operations has before it S. 1439, 
tho Export Reorganization Act of 1976. 



45 



CRS-45 

NRC Export Licenses 

Commercial organizations wishing to trade in export materials and fa- 
cilities to a country with an agreement for cooperation must apply to the 
Nuclear Regulatory Commission for an export license. The NRC in turn 
asks the executive branch through the Department of State to provide infor- 
mation to assist it in a determination of whether issuance of the license 
is consistent with U.S. national security interests. After review and con- 
sultation with other agencies, the State Department provides NRC with the 
collective recommendations of the executive branch on the issuance of the 
license. 

The information provided in the State Department review falls into two 
categories. The first is technical data relating to safeguards in the recipient 
country. The second is information of a more general policy nature, bearing 
on the effect of the export on U.S. objectives regarding the spread of nuclear 
weapons. The first category includes information relating to the terms of 
the agreement for cooperation between the United States and the government 
of the recipient; the acceptance and implementation by the recipient country 
of IAEA safeguards and/or other appropriate bilateral understandings; and 
the practices of the recipient's government with respect to physical security 
of nuclear materials and facilities. The second category of information in- 
cludes the executive branch's assessment of the recipient country's policy 
with regard to proliferation; and any other information and evaluations 
bearing on the proposed license.* 

* Cf. , statement of NRC Commissioner Gilinsky, July hearings, p. 49. 



46 



CRS-46 

According to NRC Commissioner Gilinsky, this implementation of 
NRC's export licensing authority under the Energy Reorganization Act of 
1974 has resulted in a sound decisionmaking process which brings to the 
Commission for final action an integrated, balanced evaluation of the various 
ingredients necessary to prudent nuclear export decisions. The importance 
of integrating Government action on nuclear exports in order to support a 
coherent overall U.S. antiproliferation policy, he stressed, cannot be over- 
emphasized. He opposed proposals to reallocate export licensing responsi 
bilities, saying:" 

In my view, the present system is essentially sound, and 
should be given an adequate trial before legislative adjustments 
are considered. I believe we have achieved a good measure of 
control over nuclear material and facility exports, although ad- 
mittedly there may still be facets of the nuclear export licensing 
process which need some attention and thought. 

Not all nuclear exports, however, require NRC licenses. As Commis- 
sioner Gilinsky pointed out, government to government transfers of nuclear 
materials or facilities are exempt. ERDA is responsible for such sales, 
grants or leases.-''" 

At this point there is a potential problem. The NRC approval of the ex- 
port license can be viewed in different ways. One is that the NRC simply 
performs a strictly ministerial function and issues the license when the 
forms are complete and are backed by a file of analysis and advice from the 
executive branch. The issuing of dog and drivers' licenses is a typical 

* July hearings, p. 49. 
** Ibid . , p. 50. 



47 



CRS-47 

ministerial function. The other is that the NRC itself will make its own in- 
dependent determination. Commissioner Gilinsky supports the latter view. 
One factor influencing the future of NRC export licensing is its ability to 
recruit and organize a staff able to make sober and reliable assessments. 
On one hand, NRC does not want to become a rubber stamp for the State 
Department or ERDA. On the other hand, it would avoid bureaucratic 
delay, negative response or avoidance of controversial decisions. The si- 
tuation is further complicated because the Administration has chosen to 
promise U.S. nuclear aid and products to various countries as a carrot 
to gain their cooperation with U.S. foreign policy. For example, com- 
mitment by the President to sell nuclear power reactors to Egypt or to 
Iran or to Israel could produce White House pressures on the NRC to ap- 
prove the required licenses without argument or delay. How well the NRC 
could stand up to such pressure is a matter of concern. Some Members 
of Congress believe that the control of proliferation is important enough 
to require an independent check upon the President by the NRC. The trend 
over recent years to view independent regulatory agencies, including the 
NRC, as organs to carry out a President's economic and other programs 
and to expose these agencies to influence of the President through his 
powers of appointment and removal of key officials and his control over 
the budgets and appropriations can run counter to this congressional intent. 
At issue is how much the NRC should be insulated and protected from 
direct or indirect pressures of the executive branch when it is deciding 
what to do about a potentially controversial export license request. 



48 



CRS-48 

The first year of NRC's safeguards history is notable because of its de- 
cision of March 1974 to limit the issuance of export licenses pending the 
completion of a review of the regulations and procedures followed by NRC 
and other Government agencies for the licensing of exports. During the 
following review period, the NRC Commissioners personally reviewed all 
export license applications involving reactors or significant quantities of nu- 
clear materials. The announcement generated so much furor that the NRC 
a few weeks later issued another statement to note and correct what it saw 
as misapprehensions. It said in par - 

The Nuclear Regulatory Commission has noted several recent 
storips carried in the press in the United States and abroad 
which have stated or implied that the NRC has placed a ban on 
exports of nuclear materials. The thrust of these stories has 
been that nuclear fuel needed for power and research reactors 
abroad, the supply of which the U.S. had earlier agreed to as- 
sure, has been cut off. The NRC categorically stated today that 
there has been no ban placed upon such shipments by the NRC. 

This incident is a notable illustration of how sensitive a subject the li- 
censing of nuclear exports can be. 
Departmpnt of Commerce Export Licenses 

Under the regime of the Atomic Energy Commission, the AEC di 
its control over nuclear exports with the Department of Commerce, an ar- 
rangement which has been continued by the Nuclear Regulatory Commis- 
sion. Under this arrangement, the Department of Commerce licenses 
ports of nuclear facility componpnts. Although the Atomic Energy Act of 
1954 permits the NRC to make a determination to lice. rt of prini 

:C press release no. 75-90. April 15, 1975. 



49 



CRS-49 

components of facilities, this authority has never been exercised. The Com- 
merce Department also licenses export of heavy water and other items 
potentially useful in foreign nuclear programs. The Department obtains ad- 
vice from the Energy Research and Development Administration, not from 
NRC, on the export of such items. In addition, the Department of Commerce 
will not license export of items on a list of critical exports that has been 
compiled by the international coordinating committee on export policy to- 
ward communist countries, COCOM, on which are represented most NATO 
states plus Japan. The purpose of this committee is to embargo the export 
of strategic items to Sino-Soviet bloc countries. There are many atomic 
energy related items on the COCOM list. ERDA, not NRC, participates 
in the development and updating of these lists. 
ERDA Approval of Technology Exports 

The export of physical objects — nuclear materials and equipment — is 
controlled by the Nuclear Regulatory Commission and the Department of 
Commerce. However, the control of exports of intangible information and 
technology remains in the hands of the Energy Research and Development 
Administration under the Energy Reorganization Act of 1974. ERDA is well 
aware of this residual responsibility and recently reissued regulations 
governing such exports, which it does indirectly by regulating certain 
activities by Americans, as individuals or companies, in foreign atomic 
energy programs.* The basis for this continuing ERDA function is section 

* Unclassified activities in foreign atomic energy programs. 10CFR 810. 
Federal Register, vol. 40, Sept. 30, 1975: 44826-44828; and Oct. 30, 1975: 
50457. 



50 



CRS-50 

57.b(2) of the Atomic Energy Act of 1954 as amended.* These NRC regu- 
lations begin with a general authorization of activities which do not require 
specific caseby case authorization. Activities which require specific autho- 
rization include the following: 

(i) Designing or assisting in the design of facilities for the 
chemical processing of irradiated special nuclear material, 
facilities for the produciton of heavy water, facilities for the 
separation of isotopes of uranium, or equipment or components 
especially designed for any of the foregoing; or 

(ii) Constructing, fabricating, or operating such facilities; or 

(iii) Constructing, fabricating, or furnishing equipment, or 
components especially designed for use in such facilities; or 

(iv) Training foreign personnel in the design, construction, 
fabrication, or operation of such facilities or equipment or 
components especially designed therefore; or 

(v) Furnishing information not available to the public in pub- 
lished for for use in the design, construction, fabrication, or 
operation of such facilities or equipment or components espe- 
cially designed therefore. 

In addition, ERDA has determined, in a blanket regulation, that activities 

not generally authorized which constitute directly or indirectly engaging in 

the production of any special nuclear material outside of the United States 

will not be inimical to the interest of the United States and are authorized 

provided that they: 

(1) Do not involve the communication of Restricted Data or other 
classified defense information; and 



r:tion 57.2(b) makes it unlawful for any person to directly or indirectly 
engage in the production of any special nuclear material outside of the United 
States except (1) under an agreement for cooperation made pursuant to sec- 
tion 123, or (2) upon authorization by the Commission after a determination 
that such activity will not be inimical to the interest of the United States. 



51 



CRS-51 

(2) are not in violation of other provisions of law; and either, 

(3) are limited to participation in (i) meetings of conferences 
sponsored by educational institutions, laboratories, scientific or 
technical organizations; (ii) international conferences held under 
the auspices of a nation or group of nations; or (iii) exchange 
programs approved by the Department of State; or 

(4) are limited to furnishing of information which is available 
to the public in published form or which will be made available 
to the public in published form within 60 days after the furnishing 
thereof. 

The ERDA regulations specify that the Administrator will approve an 

application for a specific authorization to engage directly or indirectly in 

the production of special nuclear materials outside of the United States if, 

after taking into account several factors, he determines that the activity 

will not be "inimical to the interest of the United States. "* 

If the Administrator grants such an authorization, he may later revoke, 
suspend or modify the authorization in whole or in part if he finds that the 
conduct of any or all of the authorized activities would be inimical to the 
interests of the United States. 

Administration of this approval function by ERDA is worth attention 
because, unlike nuclear materials or facilities or components, nuclear 



* The factors to be taken into account include: (1) whether the United States 
has an agreement for cooperation with the country in which the proposed ac- 
tivity will be conducted; (2) whether the country in which the proposed ac- 
tivity will be conducted is a party to the treaty on the Non- Proliferation of 
Nuclear Weapons (NPT) and, pursuant thereto, has entered into a agreement 
with the International Atomic Energy Agency (IAEA) for the application of 
safeguards to its peaceful nuclear activities; (3) whether the country in which 
the proposed activity will be conducted, if not a party to the NPT, will accept 
IAEA safeguards with respect to the project; (4) the relative significance of 
the proposed activity and availability of comparable assistance from other 
sources; and (5) any other fact which may bear upon the political, economic, 
or security interests of the United States. 



52 



CRS-52 

technology and information are intangible, vague and difficult to define and 
to delimit with precision. 

On the whole, there is the possibility for divergent and incompatible 
actions between NRC and ERDA. Since ERDA is under direct Presidential 
control, it is conceivable that for a given major export program important 
to U.S. foreign policy, ERDA might approve export of technology while 
NRC might question or even decide not to license the export of the related 
materials and equipment, involved. 
Legislation Affecting Nuclear Exports 

The proposal of President Nixon in 1974 to provide both Egypt and Israel 
with substantial assistance in nuclear power, including nuclear powerplants, 
the attempts of South Korea and Pakistan to import fuel reprocessing capa- 
bility, and the efforts of Iran and Brazil to acquire self-sufficient nuclear 
power industries have generated substantial congressional interest in ways 
to further limit future nuclear proliferation. Table II lists bills that were 
proposed to this end during 1975. Of these, S. Res. 221 was approved by 
the Senate on December 12, 1975. Central concepts of these bills included 
reorganization of nuclear export licensing, a moratorium on export licenses, 
congressional approval of transfers, a prohibition of transfers to non-NPT 
states, limitation upon Export-Import Bank financing of nuclear exports to 
non-NPT nations, support for stronger international export controls and 
safeguards, and a proposal for an OTA study of safeguards. A descrip- 
tion of S. Res. 221 and brief discussion of other concepts follow. 



53 



CRS-53 



Table II 

BILLS AND RESOLUTIONS ON EXPORT CONTROLS 
AND SAFEGUARDS FOR NUCLEAR TECHNOLOGY 



Bills to Strengthen Control of Exports of Peaceful Nuclear Technology 

S. 1439 - (Percy) 4/15/75. Government Operations 

A bill to reorganize and centralize the export licensing functions of the 
Federal Government for nuclear materials, technology, or facilities, and 
improve international safeguards procedures. 

4/24, 4/30, 5/1/75 - Hearings 

S. 1826 - (Gravel) 5/22/75. Atomic Energy 

The Nuclear Power Reappraisal Act- -A bill to suspend the licensing of 
nuclear powerplant construction and exports pending a five-year compre- 
hensive study by the Office of Technology Assessment of the nuclear fuel 
cycle. 

No action 

S. 2329 - (Stevenson) 9/10/75. Banking, Housing and Urban Affairs 

A bill to amend the Export-Import Bank Act to limit financing for sales 
of nuclear materials and technology to state not a party to the NPT. 

No action 

H.R. 622 - (Long, Md. ) 1/14/75. Atomic Energy 

A bill to prohibit the transfer of nuclear materials to countries which 
have not ratified the NPT. 

No action 

H.R. 6082 - (H.R. 7223, 7224) - (Diggs) 4/16/75. Atomic Energy 

A bill to prohibit the transfer of nuclear materials to countries which 
have not ratified the NPT. 

No action 

S. Con. Res. 69 - (Cranston) 10/9/75. Atomic Energy 

A bill to urge, in part, a halt on further transfers- -exports--of nuclear 
technology to countries not accepting IAEA safeguards or not joining the 
NPT, and to urge agreement among suppliers to reprocess plutonium in 
secure regional centers. 

No action 



70-303 O - 76 - 5 



54 



CRS-54 



H.R. 8282 (8297, 8685) - (Biaggi) 6/26/75. Atomic Energy 

A bill to prevent the proliferation of nuclear weapons by limiting the trans- 
fer of certain nuclear technology and materials. 

No action 

H.R. 8342 - (Long, Md. ) 6/26/75. Atomic Energy 

A bill to prevent the proliferation of nuclear weapons by limiting the trans- 
fer of certain materials. 

No action 

Resolutions to Control Peaceful Nuclear Exports and Strengthen Safeguards 

S. Res. 188 (S.R. 199) - (Mondale) 6/18/75. Atomic Energy 

A resolution urging the President to seek an immediate international mo- 
ratorium on the transfer to non-nuclear weapon countries of nuclear en- 
richment and reprocessing equipment and technology. 

No action 

S. Res. 221 - (Pastore) 7/26/75. Foreign Relations 

A resolution relating to international cooperation in strengthening safe- 
guards of nuclear materials 

No action 

H. Res. 609 - (Ottinger) 7/18/75. International Relations 

A resolution urging the President to seek agreement among the nations 
supplying nuclear equipment and technology not to transfer it to non-NPT 
nations. 

No action 

H. Con. Res. 371 - (Zablocki) 7/30/75. International Relations 

A resolution to declare, in part, the desire of Congress to halt any 
further transfers of nuclear fuel, technology and equipment to any country 
which has not accepted IAEA safeguards for all of its nuclear activities or 
has not become a party to the NPT, if all other major suppliers agree to 
a similar halt of such transfers. 

A Bill Requiring an Office of Technology Assessment Study of Plutonium 

Safeguards 

S. 1197 - (Tunney) 3/17/75. Atomic Energy 

H.R. 3618 - (H.R. 4945, H.R. 6394) - (Aspin) 2/25/75. Atomic Energy 
The Plutonium Recovery Control Act- -Contains a section requiring OTA 
to investigate the risks of unauthorized diversion of plutoniurn. 

No action 



55 



CRS-55 

S. Res. 221 . --On July 26, 1975, Senator Pastore introduced Senate 
Resolution 221.* Its purpose was to convey the sense of the Senate that 
the President should: 

(1) Seek immediate international consideration of strengthening the ef- 
fectiveness of the safeguards of the International Atomic Energy Agency and 
intensified cooperation of nuclear supplier nations to insure that the most 
stringent safeguards are applied to the transfer of nuclear equipment and 
technology; 

(2) Seek an intensive cooperative international effort to strengthen and 
improve the scope, comprehensiveness and effectiveness of the international 
safeguards on peaceful nuclear activities so that there will be a substantial 
and immediate reduction in the risk of diversion; or theft of plutonium and 
other special nuclear materials to military or other uses that would jeopar- 
dize world peace and security; and 

(3) Seek restraint by nuclear supplier nations in their exports of nu- 
clear technology, and their cooperation in assuring that such equipment and 
technology only is transferred to other nations under the most rigorous, 
prudent and safeguarded conditions designed to assure that the technology 
itself is not employed for the production of nuclear explosives. ** 

The resolution passed the Senate on December 12, 1975. 
Reorganization of nuclear export licensing . --The concept of reorganizing 
and centralizing the export licensing functions of the Federal Government 

* For himself and for Senators Mondale, Inouye and Montoya. 

** Cf . , U.S. Congress. Senate. International Safeguards of Nuclear Ma- 
terials. Sen. Rept. No. 94-525, Dec. 10, 1975, pp. 1,2. 



56 



CRS-56 

for nuclear materials, technology and facilities is embodied in S. 1439. 
The bill's sponsors believe that centralization of the Federal Government 
export functions for nuclear materials would improve the decision-making 
and permit closer oversight for such exports. 

The latest version of S. 1439, dated January 8, 1976, would make five 
functional changes, expand congressional participation, make four proce- 
dural changes and require two studies for Congress. The bill would make 
the following functional changes: 

(1) Consolidate licensing for all peaceful nuclear exports in the NRC. 
These export control functions would include those now exercised by ERDA 
and the Department of Commerce for technology and components. 

(2) Transfer to the NRC the functions of the Transportation Depart- 
ment relating to the transportation of radioactive materials. 

(3) Designate the State Department as the lead agency for negotiating, 
renegotiating and administering agreements for nuclear cooperation, with 
close cooperation and technical assistance of ERDA. 

(4) Require the Arms Control and Disarmament Agency to prepare and 
submit Nuclear Proliferation Assessment Statements to the NRC, State De- 
partment and Congress for all U.S. nuclear agreements and subsequent 
agreements with other countries and for all strategically significant nuclear- 
export license applications. 

(5) Require ERDA to establish a safeguards training program for na- 
tions receiving peaceful nuclear assistance from the United States. 



57 



CRS-57 

(6) Expand congressional participation. Under the Atomic Energy Act 
of 1954 as amended, agreements for nuclear cooperation after they have 
been approved by the President must lie before Congress for specified num- 
bers of days. For the more sensitive agreements, the Joint Committee on 
Atomic Energy must report its views and recommendations to Congress, 
together with an accompanying proposed concurrent resolution stating 
whether or not Congress favors the proposed agreement. If Congress 
passes a resolution stating that it does not favor an agreement, the agree- 
ment cannot become effective. * 

S. 1439 would provide a substantial new function for Congress for cer- 
tain nuclear export licenses. It would permit the NRC to submit to Congress 
the final determination on approving a nuclear export application that raises 
substantial foreign policy considerations that the NRC cannot adequately re- 
solve. 

S. 1439 as revised would mandate the following procedural changes for 
licensing of nuclear exports: 

(1) Require the State Department to take into full consideration the rec- 
ommendations and policies of the NRC concerning the licensing and autho- 
rization of exports, before negotiating or renegotiating nuclear agreements 
and subsequent arrangements under these agreements. 

(2) Require the State Department to furnish NRC with all executive 
branch data and recommendations that are required by the NRC to make its 
nuclear export licensing decisions. 

* Section 123(d) of the Atomic Energy Act of 1954 as amended. 



58 



CRS-58 

(3) Require the NRC to take into account the adequacy of safeguards 
in the recipient country against nuclear diversion, theft or sabotage. This 
consideration would be part of the NRC's statutory determination whether 
a nuclear export would be inimical to the common defense and security and 
public health and safety of the United States. 

The bill would require two studies for Congress: 

(1) A study of the feasibility of internationalizing all strategically sig- 
nificant parts of the nuclear fuel cycle, to be done by the State Department 
with assistance from ERDA; and 

(2) A study of the differences and interactions between nuclear safe- 
guards as applied by the United States and the International Atomic Energy 
Agency, to be done by the NRC. 

A five-year moratorium on export licenses for nuclear powerplants . -- 
The proposed Nuclear Power Reappraisal Act of 1975, S. 1826, would re- 
quire the NRC both to cease granting licenses for the export of nuclear 
fission powerplants and to cease granting licenses for the construction of 
domestic nuclear powerplants. During a five-year licensing moratorium 
the Office of Technology Assessment would undertake a comprehensive study 
of the nuclear fuel cycle with particular emphasis on the potential conse- 
quences of the proliferation of nuclear fission powerplants in the United 
States and elsewhere. The resumption of the licensing of domestic construc- 
tion, and the export of nuclear powerplants would be dependent upon a con- 
gressional determination that the nuclear fuel cycle poses no extraordinary 
threat to public health and safety and is economically viable, and pas 

igislation to authorize resumption of i instruction licensing. 



59 



CRS-59 

Prohibition of nuclear exports without congressional approval . --H. R. 
622 would prohibit the transfer of atomic technology to foreign powers 
without the express approval of Congress. This proposal builds upon the 
work of the 93d Congress in expanding the congressional power to disapprove 
of international nuclear cooperation agreements. (Public Law 93-485.) 

Prohibition of the transfer of nuclear materials to non-NPT nations . -- 
The ratification of the Non- Proliferation Treaty as a condition for export 
of nuclear materials to a given country is embodied in several of the nu- 
clear export control bills introduced in the 94th Congress. This criteria 
probably reflects one or both of the following: an endorsement of the value 
of the NPT and the ability of its safeguards requirements to check nuclear 
proliferation; and a means of pushing non-NPT nations to sign the treaty 
in return for access to U.S. nuclear technology, materials, and financing. 

H. R. 6082 and its identical bill H. R. 7223 would prohibit the sale, 
shipment, transfer, or exchange, direct or indirect, of enriched uranium, 
plutonium, any source of special fissionable material, equipment for pro- 
cessing, use or production of source or special fissionable material, and 
scientific or technical information to any country which has not ratified the 
NPT. The only exceptions would be in cases where the President determines 
that the sale, shipment, transfer, or exchange is essential to the national 
security of the United States and reports this determination to Congress, 
and Congress by concurrent resolution, approves the sale, shipment, trans- 
fer or exchange. 

The language in H. R. 6082 indicates that its authors were concerned 
that its restrictions apply to the export and re-export of U.S.: technology, 



60 



CRS-60 

knowledge, equipment, materials and other items used at all stages of the 
nuclear fuel cycle. In providing for exceptions to this law, the authors 
have required that Congress expressly approve of the proposed transfer of 
nuclear materials, technology, etc. 

H. R. 8282, and its identical bills, expands on the notion of limiting 
peaceful nuclear exports to nations which have ratified the NPT by allowing 
the conclusion of a safeguards agreement with the IAEA or Euratom as a 
substitute for NPT ratification. These bills would prohibit the NRC from li- 
censing or authorizing the export, or ERDA from engaging to allow the ex- 
port, of nuclear fuel or nuclear technology to any country which: 

--is not a party to the NPT and which develops either an enrichment 
or reprocessing plant without concluding an agreement with the IAEA or 
Euratom (which are parties) by which all its present and future nuclear faci- 
lities are made subject to safeguards established by either agency against 
diversion of nuclear material, or 

--furnishes or agrees to furnish uranium enrichment or nuclear fuel 
reprocessing plants to countries not party to the NPT. 

These prohibitions would be waived if the President determines that the 
national security interests of the U.S. would best be served by the issuance 
of such license or authorization and provides this written determination to 
Congress at least 90 days prior to the issuance of such license or authori- 
zation. 

H.R. 8342 is identical to II. R. 8282 except that it would require the 
Presidential determination of national security interest to lie before Con- 
gress for sixty rather than ninety days. 



61 



CRS-61 

These bills focus on a specific type of importing country, one which is 
a potential supplier of nuclear enrichment and reprocessing equipment. U.S. 
concern about this aspect of the nuclear fuel cycle is due to the fact that 
reprocessing equipment is vital to the extraction of plutonium from spent 
nuclear reactor fuel, and plutonium is an essential ingredient of nuclear 
explosives. Highly enriched materials are also essential to bomb manu- 
facture. 

Two similar bills to further reduce the risk of proliferation by limiting 
nuclear nuclear exports to nations which will accept IAEA safeguards for all 
their nuclear activities by and providing pressure on other states to become 
party to the NPT are H. Con. Res. 371 and S. Con. Res. 69. The former 
was the subject of hearings by the House Committee on International Re- 
lations in November 1975; the latter was discussed at length by Senator 
Cranston when he introduced it on October 9, 1975.- Both bills express 
congressional support for a halt on further transfers of nuclear fuel, tech- 
nology and equipment to any country which has not accepted International 
Atomic Energy Agency safeguards on all of its nuclear programs, or which 
by January 1976 has not become a party to the NPT if all other major 
nuclear suppliers agree to a similar halt on such transfers. Second, the 
bills urge an international agreement providing that with respect to any plu- 
tonium for peaceful uses resulting from any transfer between countries of 
nuclear fuel, technology, or equipment, all processing of such plutonium 
(from its extraction from spent reactor fuel elements through its processing, 

* Cf. , Congressional Record, October 9, 1975, pp. S18098-18102. 



70-303 O - 76 - 



62 



CRS-62 

storage and final fabrication into new fuel elements and their installation 
into nuclear reactors) will be performed in regional facilities which are 
heavily protected and guarded under the strictest possible multinational 
safeguards. In addition, the Senate bill would urge a halt to the production 
of weapons grade material for weapons under an adequate verification sys- 
tem. Following the implementation of this provision, Congress would fur- 
ther urge the sharing of access to and the product of nuclear enrichment 
facilities of major nuclear powers with all nations who sign the NPT and 
accept IAEA safeguards. 

Limit Export- Import Bank financing of nuclear exports to non-NPT na - 
tions . --Ex port -Import Bank loans have been used to finance purchases by 
other nations of U. S. nuclear materials and technology. S. 2329 would 
amend the Export-Import Bank Act of 1945 by adding the requirement that 
"no loan, guarantee, or other assistance shall be approved by the Bank's 
Board of Directors for the export of goods, technology, or services in- 
volving or relating to nuclear energy production or research in any country 
which is not a party to the NPT. " This requirement would be waived if the 
President finds that the specific transaction is essential to the national se- 
curity interests of the U. S. and reports such finding to the Congress at 
least twenty-five days prior to the date of final approval. Further, no loan, 
guarantee, or other assistance would be approved by the Bank's Board of 
Directors for the export of goods, technology, or services relating to nu- 
clear energy or research unless the Bank has informed the Director of the 
U.S. Arms Control and Disarmament Agency thereof at least fifty days prior 
to the Hate of final approval. 



63 



CRS-63 

This bill represents another affirmation of the value of the NPT and its 
safeguards provisions, and another means of encouraging nations to sign 
the NPT. 

Resolutions supporting stronger international nuclear export controls and 
safeguards . --Several resolutions introduced in the Senate and House would 
urge the President to seek either restraint or a temporary moratorium on 
the transfer of nuclear technology internationally to provide time to nego- 
tiate improved international safeguards. Concern for controlling the 
export of enrichment and reprocessing equipment and technology, and prohi- 
biting exports of nuclear equipment and technology to non-NPT nations also 
appears in these bills. 

S. Res. 188 and S. Res. 199 would urge the President to seek an im- 
mediate international moratorium on the transfer to non-nuclear weapons 
countries of nuclear enrichment and reprocessing equipment and technology 
to permit time for the negotiations of more effective safeguards against the 
proliferation of nuclear weapons capability. 

H. Res. 609 would express the. sense of the House of Representatives 
that the President should seek agreement from other nations capable of sup- 
plying nuclear technology not to transfer such technology to nations which 
have not ratified the NPT. It would direct the President to urge supplier 
nations to suspend the transfer of nuclear enrichment and reprocessing fa- 
cilities and technology to allow time for the negotiation of an agreement 
to reduce the risk of diversion or theft of nuclear materials. 

Requiring the OTA to study safeguards measures for plutonium . --The 
proposed Plutonium Recovery Control Act of 1975, S. 1197 and H.R. 3618, 



64 



CRS-64 

would prohibit the licensing of certain activities regarding plutonium until 
expressly authorized by Congress, and provide for a comprehensive study 
of plutonium recycling. As part of this comprehensive study the Office of 
Technology Assessment would investigate: the risks of the unauthorized 
diversion or theft of plutonium and the fabrication and use of unauthorized 
nuclear devices made from it; and the safeguards measures needed to mini- 
mize the unauthorized diversion or use of plutonium. 



65 

CRS-65 
VI. THE INTERNATIONAL FRAMEWORK FOR LIMITING PROLIFERATION 

Technical assistance and the export of nuclear materials, equipment and 
facilities contribute both to the further expansion of civilian nuclear power 
and to the potential proliferation of nuclear weapons. This assistance and 
export takes place within a framework of treaties, international organiza- 
tions, bilateral and multilateral agreements between countries, and informal 
agreements. The dimensions and details of the framework have been 
formed not so much by consideration of what is most required to minimize 
further proliferation, but by consideration of what it was possible to erect 
within limitations of international rivalries and domestic politics. So it 
is not surprising that the framework has limitations. The very existence 
of the framework marks a notable achievement of innovation in diplomacy 
and foreign policy. Nevertheless, the framework may not now be capable 
of supporting stronger or additional measures to slow the future spread 
of the potential ability to make atom bombs, according to witnesses. 

The principal documents that comprise the framework include inter- 
national agreements, sales contracts, export licenses and export authori- 
zations. Table III shows the nature and parties to these documents. The 
variety of these documents, their purpose and the parties to them form a 
complex picture that requires careful attention to understand. That under- 
standing, however, is necessary for anyone who would address the ade- 
quacy of the international framework to limit further proliferation of nu- 
clear weapons. 



66 



CRS-66 

The purpose of this chapter is to describe the principle parts and features 
of the framework and identify some major related issues. 

Table III 
BASIC DOCUMENTS FOR NUCLEAR EXPORTS AND THEIR CONTROL 



Document 



Coverage 



Parties 



International 
Agreement 



Umbrella 



The U.S. and foreign govern- 
ments 



Sales Contract 

1. Enrichment 
services 

2. Other 
products 

3. Technology 



Specific 
Transaction 

Specific 
Transaction 

Specific 
Transaction 



ERDA and foreign client 
(company or government) 

U.S. company and foreign 
client (company or government) 

U.S. company and foreign 
client (company or government) 



Export license 
for Nuclear 
Materials, 
Equipment 



Specific 
Transaction 



U.S. Nuclear Regulatory Com- 
mission and exporter for major 
orders, or Dept. of Commerce 
for minor orders 



Export Authori- 
zation for 
Technology 



Specific 
Transaction 



ERDA and the exporter 



The World Nuclear Market 



The more any technology is used, the more likely it is to spread through- 
out the world. Nuclear power is no exception, and a growing world use of 
nuclear energy generates an increasing demand for nuclear materials. 



67 



CRS-67 

equipment and facilities in the world market. This growth may help the 
energy problems of importing countries and increase high value exports for 
supplier countries. However, this anticipated growth will escalate the chal- 
lenge of proliferation. 

World use of nuclear power is expected to increase rapidly during the 
next two decades. Early in 1975 the International Atomic Energy Agency 
forecast that the number of nuclear powerplants throughout the world would 
increase from 200 in 1975 to 800 by 1985, with substantial increases also 
in the number of supporting facilities in the nuclear fuel cycles, as shown 
in Table IV. A world nuclear capacity of some 700, 000 megawatts by 
1985 would produce a cumulative 700 metric tons of plutonium by 1985 in 
thermal and fast reactors, with somewhat more than 500 metric tons of 
that amount contained in the reactors and the rest either recovered or in 
used nuclear fuel. * 

The nuclear industry's estimate of the world nuclear market produces 
more optimistic figures. According to testimony, some 102 nuclear power 
stations representing 29, 000 megawatts are licensed to operate outside the 
United States today and another 324 are either under construction, on order, 
or planned. This compares with 55 nuclear powerplants licensed to operate 
in the United States, representing 37, 000 megawatts of generating capacity, 
with another 179 new plants expected for the future.** 

* International Atomic Energy Agency Bulletin, vol. 17, April 1975, 
pp. 7-9. 

** Cf. , statement of A.L. Bethel, Westinghouse Electric Corp., in July 
hearings, p. 62. 



68 



CRS-68 

Table IV 
PROJECTED FACILITIES IN THE WORLD NUCLEAR FUEL CYCLE 



Type of Facility 



1975 



1977 



1980 1985 



Power Reactors 

Uranium Fuel Fabrication Plants 

Uranium and Plutonium Mixed 
Oxide Fuel Fabrication Plants 

Irradiated Fuel Reprocessing 
Plants 

Enrichment Facilities 



200 

24 

21 

6 
8 



280 
28 

23 

8 

9 



420 
36 

26 

12 
10 



800 
55 

30 

17 
13 



Source: International Atomic Energy Agency Bulletin, April 1975, p. 9. 

The forecasts of a growing international nuclear trade have caused a 
concern in some public organizations about further proliferation of nuclear 
weapons. NRC Commissioner Gilinsky pointed out that the number of na- 
tions with active civilian nuclear power programs or definite plans for such 
programs is continually increasing, with a consequent increase in interna- 
tional transactions in nuclear materials and technology. More than half a 
dozen nations are now acting as nuclear exporters and the pace of world nu- 
clear trade has been quickened by recent increases in world oil prices.* 
During the 1950s and well into the 1960s, the United States was the dominant 
supplier of nuclear materials, equipment and facilities on the world market. 



* July hearings, p. 47. 



69 



CRS-69 

Now, as ERDA points out, the United States is only one of many suppliers 
and can no longer unilaterally inhibit proliferation by controls on its ex- 
ports. * 

The U.S nuclear industry is well aware of and is deeply involved in the 
day-to-day competition with companies from W~st Germany, France and 
Canada. It is clear that this competition for overseas sales is severe and 
is expected to become even more intense as the production capacity of the 
supplier countries expands. The U.S companies in this competition have 
to comply with regulations of the Federal Government and are concerned 
that some competing overseas suppliers maybe less restricted by their gov- 
ernments. ** 

At the time of the Subcommittee's hearings, there were twelve projects 
in six countries on which at least one U.S. power reactor vendor had sub- 
mitted bids. These projects were in Austria, Egypt, Spain, South Africa, 
Sweden, and Switzerland. Additionally, bids from U.S. suppliers had been 
invited by Israel, and Iran had held serious discussions with U.S. firms 
concerning nuclear powerplants to supplement those to be built by France 
and Germany. Countries planning to further expand their nuclear power 
include Korea, Spain and Switzerland. Greece is planning its first project 
and Denmark and Ireland are exploring possibilities for nuclear power. *** 

* Cf. , statement of Dr. A. Friedman, ERDA, Ibid . , p. 33. 

** Cf. , statement of A. L Bethel, W-stinghouse Electric Corp., Ibid . , 
p. 64. 

*** Information supplied to the Subcommittee by A. Friedman, ERDA. Cf. , 
July hearings, p. 40 



70 



CRS-70 

That there is an expanding world market for nuclear technology and its 
products does not mean the future structure of the world's nuclear industry 
is now firm. While large and politically irreversible commitments to nu- 
clear power have been made in many countries, the basic pattern of the 
structure for worldwide development of the essential nuclear fuel cycle 
support facilities --uranium enrichment, irradiated fuel reprocessing and 
nuclear fuel fabrication- -remains to be worked out. The pattern that evolves 
will be critical for future prospects for proliferation of nuclear weapons 
and the ability to make them. 

Professor Willrich analyzed the possible patterns for growth of the 
world nuclear industry. For him, the most desirable pattern would be one 
of interdependence of national nuclear industries rather than a pattern of 
national nuclear independence. In his analysis, the trend will be towards 
nuclear interdependence if national governments make their decisions on 
the basis of economic efficiency and international security.* These con- 
siderations should lead to world nuclear growth determined by economic 
circumstances of individual nations and characterized by a national spread 
of nuclear power plants, but not of key nuclear fuel cycle facilities. 

Economic criteria would probably dictate a few large regional facilities 
to supply enrichment, reprocessing and fuel fabrication services. Ideally, 
these installations would be owned and operated by multinational organi- 
zations subject to inspection and audit by the International Atomic Energy 

April-May hearings, pp. 751-2. 



71 



CRS-71 

Agency. This path of development would not appear provocative among 
nations. As a fringe benefit, it might even lead to international review for 
safety of design and plans for nuclear power plants and other facilities. 

A less desirable but also plausible future evolution of the world's nuclear 
industries would occur if national governments assign higher priority to 
nuclear power independence than to economics. Each nation then would seek 
to acquire full fuel cycle capabilities as rapidly as possible in which to pro- 
duce enriched uranium, to reprocess used fuels, and to fabricate fresh nu- 
clear fuels. In most circumstances these facilities would not be economi- 
cally efficient, but they could provide the nation concerned with part or all 
of its nuclear requirements. However, nuclear power independence, with 
its attendant capability to produce nuclear materials for weapons, would be 
viewed by neighboring countries as a threat to their security, thus turning 
them toward nationalistic development despite economic penalties. Farther- 
more, if nuclear power develops along nationalistic lines, large quantities 
of fuel materials in various forms would become widely dispersed in many 
countries and the problems of preventing national diversion or terrorist 
theft would become much more difficult, perhaps impossible to manage. 

Which pattern of world nuclear power development will prevail? 
For Professor Willrich, it is not clear. Tendencies toward nuclear power 
development along primarily nationalistic lines are to be expected in many 
countries unless countered and offset. These tendencies are not yet ir- 
reversible, unlike the basic trend toward nuclear power. However, to 
reverse the trend towards nuclear nationalism will require strong and con- 
certed governmental action within a few years. 



72 



CRS-72 

International Agreements for Cooperation 

The principal document governing U.S. export of nuclear information, 
materials, equipment and facilities is the agreement for cooperation. It is 
within the terms of these agreements that American nuclear companies write 
export contracts and the Nuclear Regulatory Commission issues export li- 
censes. There follows a brief historical review of the origins and evolu- 
tion of these agreements, their negotiation, contents, and current status. 

Background , --One initial congressional response to the advent of nu- 
clear weapons in 1946 was to severely limit export or exchange of nuclear 
information and technology. While the Atomic Energy Act of 1946 did pro- 
vide for the sharing with other countries of information concerning the prac- 
tical industrial applications of atomic energy, this could not be done until 
"effective and enforceable safeguards against its usp for destructive pur- 
poses [could] be devised." With the failure of the U.S. proposals for inter- 
national control of atomic energy, this condition never was fulfilled and 
the restriction ended the wartime nuclear collaboration of the United States, 
the United Kingdom, Canada and Belgium. The only cooperation permis- 
sible after 1946 was in exploration for and procurement of uranium ores. 
Five years later Congress slightly relaxed the restrictions by authorizing 
the Atomic Energy Commission to exchange certain information with other 
countries about the "refining, purification and subsequent treatment of 
source materials, reactor development, production of fissionable material, 
and research and development. * In this amendment Congress laid down 

* Public Law 82-235, 65 Stat. 692. 



73 



CRS-73 

four limitations for U.S. technical assistance in nuclear energy limitations 
that were retained in the subsequent overhaul of the atomic energy legis- 
lation of 1954. 
These limitations were: 

(1) a prohibition against communication of weapons design 
and fabrication data; 

(2) a requirement for adequate security standards in coun- 
tries receiving classified information; 

(3) a determination by the President that the arrangements 
would promote and would not endanger the common defense and 
security; and 

(4) a requirement that the Joint Committee on Atomic 
Energy be informed of the arrangement 30 days prior to its 
consumation. 

Statutory limitations . --When Congress rewrote the Atomic Energy Act 
in 1954, it greatly expanded the scope for international cooperation in civil 
nuclear energy, but within specific statutory restrictions. The Atomic 
Energy Act of 1954 provides the authority for the Energy Research and 
Development Administration to cooperate with any nation by distributing 
nuclear fuel and source materials and certain radioisotopes. This inter- 
national cooperation is effected through bilateral agreements for cooper- 
ation with individual nations or groups of nations. As for limitations upon 
these agreements, in Section 123 of the Act, Congress required that each 
such agreement must include: 

(1) the terms, conditions, duration, nature, and scope of 
the cooperation; 

(2) a guaranty by the cooperating party that security safe- 
guards and standards agreed upon will be maintained; 



74 



CRS-74 

(3) a guaranty by the cooperating party that any material and 
any restricted data to be transferred will not be transferred to 
unauthorized persons or beyond the jurisdiction of the cooper- 
ating party except as specified in the agreement.* 

Section 123 further requires the President to approve each agreement 
for cooperation and to make a written determination that the proposed agree- 
ment will promote rather than constitute an unreasonable risk of the common 
dpfense and security. Finally, Congress preserved for itself the option to 
intervene by requiring that a proposed agreement for cooperation, together 
with the President's approval and determination must lie before the Joint 
Committee for 30 days while Congress is in session. Last year Congress ex- 
panded this opportunity for congressional review in Public Law 93-485. It 
requires all agreements for cooperation, and amendments to them, involving 
reactors producing more than five megawatts of thermal energy be sub- 
mitted to the Congress and referred to the Joint Committee on Atomic En- 
ergy, and a period of 60 days elapse while Congress is in session. But any 
such proposed agreement can not become effective if during this time Con- 
gress passes a concurrent resolution that it does not favor the proposed 
agreement. Beforp the end of the first 30 days, the Joint Committee on 
Atomic Energy also is required to report its views and recommendations 
rosppcting the proposed agreement and to provide a proposed concurrent 



* Restricted data is a term with special meaning under the Atomic Energy 
Act of 1954. It is defined as "all data concerning (1) design, manufacture, 
or utilization of atomic weapons; (2) the production of special nuclear ma- 
terial; or (3) thp usp of sppcial nuclear material in the production of energy, 
but shall not include data declassified or removed from the Restricted Data 
gory. . . " 



75 



CRS-75 

resolution stating in substance that the Congress favors, or does not favor, 
the proposed agreement. 

Negotiation of the agreements . --The agreements for cooperation are ini- 
tially drafted by ERDA and submitted to the Department of State for review 
and comment. At this point the intent of the executive branch to enter into 
negotiation of an agreement is brought to the attention of the Joint Committee 
on Atomic Energy. After an agreed text has been developed, ERDA pre- 
sents it to the foreign party for consideration. Once agreement is reached, 
the revised text must be approved by the ERDA Administrator and the De- 
partment of State. After the approved text has been initialed by ERDA, the 
State Department and the other party, ERDA submits the agreement to the 
President for approval. At this point there is staff review in the Executive 
Office to provide the basis for the President's written determination and 
approval. Following this determination and approval, the agreement is 
formally signed by ERDA and the State Department, on behalf of the United 
States, and the other party and the agreement is submitted to Congress for 
the statutory period. 

Contents of agreements . --An agreement for cooperation provides the 
framework for subsequent individual transactions covering the supplying or 
exchange of information, materials, equipment, or facilities. Thp agree- 
ments typically contain limitations on the total amount of enriched uranium 
which may be transferred. Requests for significant quantities of uranium 
enriched to more than 20 percent, that is, over 5 kilograms of contained 
U-235, are considered case by case and, at a minimum, must satisfy the 



CRS-76 

executive branch as to economic or technical merit and acceptability of 
applicable physical security measures to protect the materials. Also, trans- 
fers can take place only within the period of the agreements. 

Concerning safeguards, these are defined in agreements to mean "a sys- 
tem of controls designed to assurp that any materials, equipment and de- 
vices committed to the peaceful uses of atomic energy are not used to fur- 
ther any military purpose. " This definition is out of date in that it does not 
recognize the problem of theft for criminal or terrorist purposes, nor does 
it apply to information and technology. In the first agreements for cooper- 
ation, the United States obtained for itself the right to send U.S. inspectors 
into the other country to verify quantities and use of materials and equip- 
ment supplied. The early agreements also included a provision for con- 
sultation on transferring U.S. safeguards to an international agency when 
it was formed. The initial U.S. policy for control over U.S. supplied items 
was established in the late 1950s by the AEC in consultation with the De- 
partment of State. The policy provided that:* 

(1) the United States would give assistance and advice to the 
recipient country in establishing a national system of control 
over materials and equipment, including adequate materials ac- 
countability and physical control measures; 

(2) the system would be subject to audit, appraisal and veri- 
fication by United States personnel; 

(3) the specific measures applied in auditing and verifying 
the system would depend upon the typp and complexity of the 
facility involved and the type and quality of the material in- 
volved; and 



,S. Atomic- Energy Commission. Major Activities in the Atomic Energy 
Programs. Januai iberl959. Washington, D.C.: U.S Government 

Printing Office. 1960, p. 110. 



77 



CRS-77 

(4) the AEC staff would provide assistance and guidance to 
cooperating countries. 

The United States has used this safeguards authority. For example, in 
1969 AEC inspectors made 52 inspections of facilities in five countries. 
The era of AEC inspections lasted until 1963 when the AEC, Japan and the 
International Atomic Energy Agency signed the first tri-lateral agreement 
which provided for the Agency to safeguard any nuclear material, equipment 
and facilities supplied to Japan by the United States. This trilateral agree- 
ment also specified that Agency safeguards would apply to any nuclear ma- 
terial produced in the Japanese facilities upon its return to the United States 
for reprocessing unless the U.S. substituted an equivalent amount of ma- 
terial in Japan. 'This last provision was to prevent IAEA safeguards from 
following the returned materials into the United States. The trilateral 
agreements suspend the U.S. safeguards rights while IAEA safeguards are 
in effect. 

Status of agreements . --In 1975 the United States had thirty agreements 
for cooperation in civil uses of atomic energy. Of these, 20 were for co- 
operation in nuclear research and power, two were for power only, and eight 
for research only. The United States also had bilateral agreements with 
Euratom and the International Atomic Energy Agency. Table V lists the 
agreements showing scope and term. 
The Non- Proliferation Treaty 

While diversion of nuclear materials from the civilian nuclear power 
fuel cycle is often pointed out as a plausible route to proliferation, the route 
used to date to acquire materials for weapons has been to build much simpler 



70-303 O - 76 - 7 



78 

CRS-78 
Table V 



I. BILATERAL AGREEMENTS FOR COOPERATION IN THE CIVIL USES OF ATOMIC ENERGY 
A Bileterals wrrh individual countries 



i and power July 25.196* July 24.1*99 

May 28 1957 May 27.1997 

Jan 24.1970 Jan 23.2000 

Sept 20 1972 S«ptl9 2002 

July 21.1955 July 13.19*0 

June 22. 1972 June 21.2014 

Mar 29.1963 Mar. 28.1*77 

powar July 7.1*70 July 6 2000 

Research Aug. 4 1955 Aug 3 1974 

" raarapur) Oct 25.1963 Oct 24. 1993 

Sapt 21,1960 Sept 20.1980 

Apr 27.1959 Apr 26. 1979 

July 9.195* July 8,1978 

July 12.1955 Apr. 11.1975 

power Apr. 15.1958 Apr 14.1978 

July 10, 1*68 July * 2003 

Mar 19 1973 Mar. 18.2014 

... June 8, 1067 June 7.1997 

July 19,1968 July 18,1998 

. June26,1974 June 75.7014 

. Aug. 22.1957 Aug 21,2007 

June 28. 1974 June 27. 2014 

Sept. 15 1966 SepL 14, 1996 

Aug. 8,1966 Aug. 7.1996 

June 27.1974 June 26.2014 

T»rkey .Research June 10. 1955 June 9.1981 

United Kingdom Oo . July 21. 1955 July 20.1976 

Oo Po-er July 15.1966 July 14.1976 

Venezuela ... Research and power Feb. 9,1960 Feb. 8.1980 

Vietnam Research July 1,1959 June 30. 1*79 



B. Bilaterals with international organizations' 



Effective Termination 



European atomic energy community Joint nuclear power program Feb. 18 1959 Dec. 31.1985 

(Euratom) 

E»ratom Additional agreement to joint nuclear power July 25,1960 Dec 31,1995 

program 
nic Energy Agency (IAEA) Supply o( materials, etc Aug 7.1959 Aug. 6.2014 



Source: U.S. Congress. Senate. Committee on Banking. Housing and 

Urban Affairs. Subcommittee on International Finance. Exports 
of Nuclear Materials and Technology. Hearings, 93d Congress, 
2d session. July 12 and 15, 1974. Washington, U.S. Govt. 
Print. Off., 1974. p. 14. 



79 



CRS-79 

facilities designed for production of fissionable materials only. Of the five 
nations possessing nuclear weapons or explosives, not one obtained the ma- 
terials from the fuel cycle of civilian nuclear power. The Indian "peace- 
ful" device that was tested in 1974 likewise did not obtain its plutonium 
from civilian nuclear power plants. It was largely in recognition of the fact 
that many nations could make nuclear weapons materials directly rather 
than divert them from nuclear powerplants that the U.S. formulated, pro- 
posed and promoted the adoption of the Non- Proliferation Treaty, which 
finally entered into force on March 5, 1970. 

The non-weapons states represent a substantial nuclear undertaking. In 
1970, 11 states other than the weapons states were operating nuclear power- 
plants. The capacity of these plants was about 5,000 megawatts, of which 
nearly half was under safeguards of the International Atomic Energy Agency. 
By mid-1975, the total nuclear power capacity outside the weapon states had 
grown to 24,000 MW in 15 countries. 

As seen by the State Department, the NPT goes far beyond U.S. bi- 
lateral agreements by requiring a nonnuclear weapons state to commit itself 
not to acquire nuclear weapons from any source, and to subject all of its in- 
dependent and indigenous nuclear activities to a peaceful use undertaking, 
verified by inspections by the IAEA. In this way the NPT closes the 
gap that fissionable materials for nuclear explosives could be acquired 
through essentially unassisted efforts of a particular nation. The NPT is 
thus a key element in achieving non-proliferation and the U.S. position is 
to strongly support the broadest possible adherence to the treaty.* 



July hearings, p. 6 



80 



CRS-80 

Professor Willrich emphasized that the concept of the NPT as a legal 
barrier against nuclear proliferation rests on the premise that fewer is 
better with respect to the number of weapons nations. This initial premise 
rests on the further premises that: (1) the security in non-weapons nations 
will be diminished if one or more of them acquires nuclear weapons; and 
(2) even the security of a nation acquiring such weapons will not necessarily 
be increased thereby.* 

The NPT requires a non-weapons party to renounce its right to make or 
acquire nuclear weapons or explosive devices. It also requires such a party 
to accept the application of IAEA safeguards on all their civilian nuclear 
activities. Any party to the treaty, both those that have nuclear weapons 
and those who do not, may export nuclear materials and equipment for 
peaceful purposes to any non-weapons countries if the importing country 
accepts IAEA safeguards for the supplied materials. There is no ban on 
exports to non-NPT nations. 

The NPT recognizes the inalienable right of all parties to "develop, re- 
search, production and use of nuclear energy for peaceful purposes except 
for the manufacture of nuclear explosive devices." In addition, and by way 
of partial mitigation for the discrimination between the weapons and non- 
weapons states, all parties to the NPT agree to facilitate to the fullest 
extent exchange of equipment, materials and information for civilian 
nuclear applications. Moreover, those parties in a position to do so are 
required to cooperate in contributing to civilian nuclear applications, 

* April-May hearings, p. 752. 



81 



CRS-81 

especially in the non-weapons parties, with due regard to the needs of de- 
veloping countries. 

Parties to the NPT . --As noted, the NPT identifies two classes of na- 
tions: those which have the bomb and those which do not. Among the weapons 
nations, the United States, the United Kingdom and the Soviet Union are 
parties to the NPT; France, India and the People's Republic of China are 
not. Of 93 non-weapons states which had signed the NPT through June 30, 
1975, 15 had not ratified it, including the industrial nations Italy and Japan. 
Israel has not signed the NPT, nor has Argentina, Brazil, Chile, Pakistan, 
Portugal or Spain. Among the Organization of Petroleum. Exporting Coun- 
tries, Iran and Iraq have signed and ratified the NPT, Libya and Egypt 
have signed but not ratified; Saudi Arabia and Algeria have not signed. 

The offer to place U.S. facilities under IAEA safeguards . --One impe- 
diment to commitment to the NPT among non-weapons nations has been con- 
cern that their nuclear industries might be put at a disadvantage in com- 
parison with those of the weapons states by IAEA inspections. This concern 
was expressed particularly by Italy, West Germany and Japan. To offset 
this argument, President Johnson, when he signed the NPT on July 1. 
1968, offered to voluntarily place U.S. commercial nuclear power under 
IAEA safeguards.* A similar offer was made by the United Kingdom. The 

* When signing the treaty, President Johnson said: "We will cooperate fully 
to bring the Treaty safeguards into being. We shall thus help provide the 
basis of confidence that is necessary for increased cooperation in the peace- 
ful nuclear field. After the Treaty has come into force, we will permit the 
International Atomic Energy Agency to apply its safeguards to all nuclear 
activities in the United States—excluding only those with direct national se- 
curity significance. Thus the United States is not asking any country to 
accept any safeguards that we are not willing to accept ourselves." 



82 



CRS-82 

Soviet Union did not join in these offers. Its position was that inspection 
of any atomic activities within a weapons country was unnecessary and ir- 
revelant, for the Treaty did not prohibit them from possession of weapons. 
President Johnson's offer was subsequently reaffirmed by Presidents Nixon 
and Ford. 

According to the State Department, in addition to its "crucial impor- 
tance" in ensuring the adherence to the treaty of other industrialized nations, 
implementation of the U.S. voluntary offer will provide the IAEA with an 
important means for improving its safeguards techniques and experience. 
It will also allow the U. S. to assert much more effectively its leadership 
role in international safeguards." If the U.S. offer is indeed as important 
as the State Department indicated, it is difficult to understand why six years 
after the entry into force of the NPT the U. S. has still to conclude its 
negotiations within the IAEA to fulfill this offer. 

Major loopholes . --The NPT relies upon the IAEA to verify through in- 
spections that nuclear materials are not diverted from peaceful uses into 
weapons or other nuclear explosives. While non-weapons parties have com- 
mitted themselves to place all their nuclear programs under IAEA 
safeguards, the NPT does not prohibit the transfer of nuclear materials to 
countries which have not signed the NPT. The only limitation is that these 
countries must agree to IAEA safeguards for the items covered by the 
transaction. Thus a non-NPT country could develop its own unsafeguarded 
nuclear capabilities, drawing upon the experience and trained manpower 

July hearings, p. 7. 



83 



CRS-83 

of the safeguarded activities without diverting the safeguarded materials 
and facilities. Dr. Herbert Scoville sees this as creating a major loop- 
hole for the eventual acquisition of nuclear weapons by non-NPT nations. * 
Indeed, India made use of this loophole to produce its first nuclear explosive. 

Another potential danger is the possible abrogation of the treaty by a 
non-weapons nation after it has acquired fissionable material as part of a 
legitimate peaceful program. Under the NPT, a nation can withdraw after 
three months notice with no penalties. 

The NPT review conference . --In May 197 5 a review conference of NPT 
members was held as required by Article VIII of the treaty.** The parti- 
cipants included 58 states party to the NPT and seven states that had signed 
but not ratified the NPT. Seven more states were represented by observers. 
The Conference supported the Agency's safeguards programs, its advisory 
work on physical protection of nuclear materials, its study of the concept 
of nuclear fuel cycle centers and its work in relation to peaceful nuclear 
explosives. The Conference recommended that the Agency should increase 
its technical assistance and related activities for the benefit of developing 
states party to the NPT. Concerning policies for exports of nuclear ma- 
terials and products, the Conference urged that ". . . in all achievable ways, 



* Cf . , Herbert Scoville, Jr., U.S. Nuclear Export Policies. Reprinted in 
the July hearings, p. 100. 

** Article VIII provides that: "Five years after the entry into force of this 
Treaty, a conference of Parties to the Treaty shall be held in Geneva, 
Switzerland, in order to review the operation of this Treaty with a view to 
assuring that the purposes of the Preamble and the provisions of the Treaty 
are being realized. 



84 



CRS-84 

common export requirements relating to safeguards be strengthened, in 
particular by extending the application of safeguards to all peaceful nuclear 
activities in importing states not party to the Treaty. " 

The Conference also stated that it considered the IAEA to be the appro- 
priate international body through which potential benefits from peaceful ap- 
plications of nuclear explosions could be made available to any non-nuclear 
weapons -state. 

Considering the potential importance of this conference, it seems some- 
what surprising that it has had little visible effect to date, particularly on 
the troublesome issue of getting developing nations such as Brazil and Ar- 
gentina to become parties. As part of its continuing oversight, the Subcom- 
mittee may wish to inquire into the goals of the U.S. participants in the 
conference, the influence of U.S. participation, and the significance of its 
outcome for U.S. nuclear policy. 
International Atomic Energy Agency Safeguards 

Any significant nuclear export from the United States to a non-weapons 
country is subject to IAEA safeguards either because the importing nation 
is a party to the NPT or because its agreement with the United States re- 
quires the export to be placed under IAEA safeguards. So the IAEA and 
its safeguards form an important part of the international framework to limit 
proliferation in an era of growing nuclear exports. The adequacy of these 
safeguards has become of concern to some Members of Congress and, 
as will be seen later, there are proposals that the Nuclear Regulatory 
Commission in licensing exports should assure itself that safeguards of the 



85 



CRS-85 

receiving country are adequate. There follows some background information 
on the IAEA, and a discussion of its safeguards functions, their adequacy, 
and what happens if a diversion is detected. 

The International Atomic Energy Agency . --The IAEA is an international 
organization that came into being on July 29, 1957, to promote the peaceful 
uses of atomic energy. While independent from the United Nations, it is 
a member of the family of international organizations that report annually 
to the United Nations General Assembly. In some instances, the IAEA may 
report to the Security Council or to the Economic and Social Council. The 
IAEA has established relationship agreements with five other specialized 
agencies of the United Nations. By October 1975 the number of IAEA member 
states totalled 109. Members included all of the Common Market countries 
and all nations of industrial consequence, as well as developing nations. 
The Agency is located in Vienna, Austria. 

The objectives of the Agency stated in the international statute that 
created it are to seek to accelerate and enlarge the contribution of atomic 
energy to peace, health and prosperity throughout the world. The Agency 
is to ensure, so far as it is able, that assistance provided by it or at its 
request or under its supervision or control is not used in such a way as to 
further any military purpose. 

The international statute provides for three principal parts of the or- 
ganization: a General Conference, a Board of Governors and a Secretariat 
headed by a Director General. The General Conference meets annually to 
discuss and make recommendations on any issue within the scope of the 



86 



CRS-86 

Statute. The Board of Governors has a uniquely sweeping authority in the in- 
ternational family. The Statute gives the Board broad authority to "carry 
out the functions of the Agency. " The Board appoints the Director General 
with the approval of the General Conference and submits an annual budget 
to the General Conference, which can accept or reject it, but not change it. 
The Secretariat is headed by the Director General who is appointed for a 
term of four years. Dr. Sigvard Eklund of Sweden is the current Director 
General. He was reappointed for his fourth four-year term in the fall of 
1973. As a point of interest, the first Director General was Sterling Cole, 
a Member of Congress who served as first chairman of the Joint Committee 
on Atomic Energy and left that post to become Director General. 

Origins of the IAEA. --The origins of the IAEA are traced to President 
Eisenhower's Atoms for Peace address to the General Assembly of the 
United Nations in December 1953. In that address the President forecast 
that the knowledge of nuclear power which some nations then possessed 
would eventually be shared by others, a forecast which has come to pass. 
To reverse the trend of atomic military buildup, he proposed peaceful uses 
of nuclear power because nuclear materials committed to peaceful purposes 
presumably would not be available for weapons. To this end he proposed 
that the nuclear nations, then primarily the Soviet Union and the United 
States, contribute fissionable materials to an international pool to be admi- 
nistered by an international agency. The pool would supply nuclear fuel 
for electricity to power-starved areas of the world. Safeguards were 
also a contemplated function. The agency would be responsible for the 



87 



CRS-87 

impounding, storage and protection of the pool of materials. President 
Eisenhower stated: "The ingenuity of our scientists will provide special safe 
conditions under which such a bank of fissionable material can be made 
essentially immune to surprise seizure. " 

The initial burst of enthusiasm for the President's proposal did not gal- 
vanize quick international action and it took almost four years to create an 
International Atomic Energy Agency with a less grandiose charge. 

IAEA safeguards . --The Agency's function which is probably of greatest 
importance for limiting proliferation of nuclear weapons is its safeguards 
function. The IAEA statute authorizes the Agency to establish and admi- 
nister safeguards designed to ensure that special fissionable and other ma- 
terials, services, equipment, facilities, and information made available by 
the Agency or at its request or under its supervision or control are not used 
in such a way as to further any military purpose; and to apply safeguards, 
at the request of the parties, to any bilateral or multilateral arrangement, 
or at the request of a state to any of that state's activities in the field of 
atomic energy. With respect to any Agency project, or other arrangement 
where the Agency is requested to apply safeguards, the Agency has specific 
rights and responsibilities, to the extent relevant to the project or arrange- 
ment to: 

(1) examine the design of specialized equipment and facilities, including 
nuclear reactors, and to approve it only from the viewpoint of assuring that 
it will not futher any military purpose, that it complies with applicable health 
and safety standards, and that it will permit effective application of IAEA 
safeguards; 



88 



CRS-88 

(2) require the observance of any health and safety measures prescribed 
by the Agency: 

(3) require the maintenance and production of operating records to assist 
in ensuring accountability for source and special fissionable materials used 
or produced in the project or arrangement; 

(4) call for and receive progress reports; 

(5) approve the means to be used for the chemical processing of irra- 
diated materials solely to ensure that this processing will not lend itself 
to diversion of materials for military purposes and will comply with appli- 
cable health and safety standards; 

(6) require that special fissionable materials recovered or produced as 
byproducts be used for peaceful purposes under continuing Agency safe- 
guards 

(7) require deposit with the Agency of any excess of any special 
fissionable materials recovered or produced as byproducts over what is 
needed for use in order to prevent stockpiling of these materials; 

(8) send inspectors into the territory of the recipient state or states, 
who shall have access at all times to all places and data and to any person 
who deals with materials, equipment, or facilities which are safeguarded, 
as necessary to account for source and special fissionable materials sup- 
plied and to determine whether there is compliance with the undertaking 
against use for military purposes, with health and safety measures, and 
with any other conditions prescribed in the agreement between the Agency 
and the state or states concerned; 



89 



CRS-89 

(9) in the event of non-compliance and failure by the recipient state or 
states to take requested corrective steps within a reasonable time, to sus- 
pend or terminate assistance and withdraw any materials and equipment 
made available by the Agency or a member for the project. 

To date the IAEA has exercised its inspection functions to verify the 
records, amounts and uses of nuclear materials, but has not exercised the 
latent health and safety function specified in the Statute. 

IAEA safeguards apply within a state either because it is a party to the 
NPT or because it has signed an agreement with a supplier state that re- 
quires the materials and equipment supplied to be under IAEA safeguards. 
The principal difference, as noted earlier, is that in an NPT non-weapons 
state the IAEA can inspect all nuclear materials and facilities, whereas 
for a non-NPT state, the IAEA safeguards and inspectors are limited to 
the materials and facilities specified in an agreement for cooperation. This 
difference was important to the Indian Government in its rationalizing of its 
development and test of a nuclear explosive using its own uranium which 
was not under IAEA safeguards in a Canadian-supplied reactor which was 
under safeguards. 

IAEA safeguards and national safeguards ideally form a coherent whole 
with each performing its own function. IAEA safeguards are not a substi- 
tute for effective national safeguards. Conversely, without effective 
national safeguards, IAEA safeguards will be ineffective. The principal ob- 
jective of IAEA safeguards is to assure prompt detection of diversion. The 
objective of national safeguards systems is to detect diversion or theft by 



90 



CRS-90 

an internal group. In the United States, safeguards also have the second 
objective of assuring protection against robbery or sabotage. 

According to ERDA, there are three principal components of safeguards 
systems in general: accountability, physical inspection and instrumentation. 
The IAEA safeguards system keeps records of all material under safeguards 
which is made available to a country, transferred out of a country, or in 
the reactors and in storage. As for physical inspection, IAEA inspectors 
may make a few visits, and they may be unannounced, to a facility to insure 
it is being operated as prescribed and the material is stored or used where 
it is supposed to be; or IAEA inspection can call for the almost constant 
presence of an inspector, depending upon the nature and quantity of the 
materials. As for technology, the use of tamperproof monitors, seals and 
cameras in sensitive areas can detect and record any unauthorized access.* 

Before the IAEA can apply its safeguards, the country involved must con- 
clude a safeguards agreement with the Agency. As of June 30, 1975, the 
Agency had concluded safeguards agreements with 53 non-weapons States 
and had 43 safeguards agreements in force. These agreements covered 47 
nuclear power stations, 115 other reactors, 29 fuel cycle facilities and 195 
other nuclear materials accountability areas. Table VI gives details. The 
Agency reports that nuclear materials under its safeguards increased from 
824 kilograms of plutonium and 4.6 tons of contained U-235 in 1969, to 
6,300 kilograms of plutonium and 43 tons of contained U-235 in 1974.** 

*Cf. , statement of A. Friedman, ERDA, July hearings, p. 41. 

** International Atomic Energy Agency. Annual Report: 1 July 1974-- 
30 June 1075. Report GC (XDC) 544, p. 40. 



91 

CRS-91 
Table VI 
FACILITIES UNDER IAEA SAFEGUARDS 



Facilities 


3D 


June' 


<m 


NPT 

30 


June 

17 


1!)75 


3U 


lime 

24 


Noil 
1974 


-NPT 
30 


I une 1975 


Nuclear power 




12 




30 


stations 
























Other reactors 




45 






55 






65 






60 


Conversion plants. 




7 






9 






If) 






20 


fabrication plants 
























and fuel reprocess- 
























ing plants 
























Other separate 




28 






86 






88 






109 


accountability 
























areas 

























Source: International Atomic Energy Agency. Annual report: 1 July 1974- 
30 June 1975. Report GC(XIX)/544, p. 40. 



92 



CRS-92 

During the year ending June 30, 1975, the Agency carried out 502 inspections 
in 37 states. Of these, 178 were for powerplants, 97 for bulk fuel fabri- 
cation plants and 227 for other facilities including research reactors.* 

The physical protection issue . --IAEA safeguards form a system for 
verifying accounts for nuclear materials by audit and inspection. They are 
intended to detect theft or diversion. The international statute does not 
authorize the Agency to prescribe requirements for physical security of 
nuclear materials and facilities or to inspect for compliance. Lacking such 
authority, the IAEA is limited to providing guidance and recommen- 
dations for the physical protection. The latest version of this IAEA guidance 
was issued in September 1975.*- After noting that it has no responsibility 
either for the provision of a state's physical protection system or for the 
supervision, control or implementation of such a system, the IAEA set 
down two objectives for state systems and two objectives for the Agency. 
These follow: 

The objectives of the state's physical security protection 
system should be: 

(a) to establish conditions which will minimize the pos- 
sibilities for unauthorized removal of nuclear material or 
for sabotage, and 

(b) to provide information and technical assistance in 
support of rapid and comprehensive measures by the state 
to locate and recover missing nuclear material. 



Ibid . 

** International Atomic- Energy Agency. The physical protection of nuclear 
material. INFCIRC/225, September 1975. 19 p. 



93 



CRS-93 

The objectives of the Agency are: 

(a) to provide a set of recommendations on require- 
ments for the physical protection of nuclear material in use, 
transit and storage,* and 

(b) to be in a position to give advice to a state's 
authorities in respect of their physical protection system 
at the request of the state. 

The IAEA efforts have been welcomed. However, and as NRC Commis- 
sioner Gilinsky cautioned, it is important to understand that IAEA's role in 
physical protection is purely advisory. The IAEA can recommend stan- 
dards for physical protection of nuclear materials in use, storage and tran- 
sit, but acceptance of these recommendations is up to each state and is not 
mandatory. Commissioner Gilinsky sees good reason for confidence that 
governments will indeed cooperate for physical security. "it is, after 
all, a clear matter of mutual security to protect against the theft of nuclear 
materials or the sabotage of nuclear facilities.""* 

Since IAEA safeguards do not extend to physical security, the United 
States in its nuclear export policy has become concerned that physical 
security measures in the recipient nation are adequate. It is NRC policy 
for "significant" exports of plutonium and highly enriched uranium (that is 
more than five kilograms of enriched uranium or two kilograms of pluto- 
nium) to require the physical security systems in the recipient country to 

* The recommendations are provided for consideration by the competent 
authorities in the states. Such recommendations could provide guidance but 
could not be mandatory upon a state and would not infringe on the sovereign 
rights of states. 

** July hearings, p. 51. 



70-303 o - 76 - a 



94 



CRS-94 

be acceptable to the United States as a condition for an export license.* 

On the other hand, it was not evident from the Subcommittee's hearings 

what criteria would be applied by the NRC in judging the acceptability of 

foreign physical security. In replying to a question about variations in 

physical security measures, NRC Commissioner Gillinsky said: 

I think you have to consider the individual circumstances in 
that country. We have not come up with a hard and fast rule on 
this matter. For example, there are some countries where 
crime is a good deal less common than it is in others. There 
are some countries which are more stable than others. I would 
imagine we would require somewhat different degrees of control. 

When further asked whether the United States should require foreign 

physical security to at least equal what is required of domestic licensees, 

Air. Gilinsky said. *** 

Let me say those standards apply to the specific situations 
in the United States --where we have private utilities, where 
nuclear industry is in private hands and so on- -there are other 
countries where these activities are all under governmental con- 
trol. So the degree of additional control required may well 
differ from country to country. I don't think that should be a 
surprising fact or conclusion. 

.Enforcement and sanctions . --One recurring issue was the use of sanc- 
tions to discourage or rectify violation of safeguards. The IAEA statute 
provides for its inspectors to report any non-compliance to the Director 
General who is to report to the Board of Governors. The Board is to 
call upon the state involved to remedy its non-compliance. If that fails, 
the IAEA is to report the non-compliance to all members of the Security 

- Ibid. , p. 56. 
** Ibid . , p. 57. 
*** Ibid. , p. 49. 



95 



CRS-95 

Council and to the General Assembly of the United Nations. In the history 
of the Agency, this has never been done. Should a nation fail to take fully 
corrective action within a reasonable time, the Board may take one or both 
of the following measures: 

(1) direct curtailment or suspension of assistance being provided by the 
Agency or by a member, 

(2) call for return of materials and equipment made available to the 
state. 

The Agency may also suspend any non-complying member from the exer- 
cise of the privileges and rights of membership. 

For violation of safeguards agreements with the IAEA under a trilateral 
agreement, the agreement between the supplier and importing countries 
could have additional provisions. In the case of U.S. agreements, various 
sanctions are provided. According to the State Department, if violations 
were to occur, a full investigation would be made followed by every effort 
to reach an amicable correction. If this failed, the agreements would give 
the United States the right to do two things: first, discontinue any further 
shipments, any further supply arrangements; and, second, require the re- 
tarn of all materials and equipment which were provided.* 

These sanctions are not impressive, although they are probably the best 
that can be negotiated. This pessimistic view is shared by NRS Commis- 
sioner Gilinsky who sees no substantial IAEA sanctions attached to its safe- 
guards. ** 

* Ibid . , statement of Myron Kratzer, Department of State, p. 18. 
** Ibid. , p. 61. 



96 



CRS-96 

While no violations of IAEA safeguards have been reported, according 
to witnesses, it would seem unrealistic to expect that as world nuclear power 
grows and international tensions fluctuate, there will be none in the future. 
Yet there appears to be little advance or contingency planning to deal with 
a reported violation. One major consideration in such planning would be 
the extent of possible unilateral U.S. sanctions. For example, would the 
United States unilaterally cut off some or all U.S. foreign and military aid 
to a violator? Would it go so far as to cut off U.S. food supplies?* There 
are no simple answers to these questions, for part of the answer must be 
a balancing of the seriousness of the violation against the potency of the 
sanctions and the impacts of their use. One does not use an elephant gun 
to shoot a fly, or a fly swatter to stop an elephant. Nonetheless, in the 
light of the importance of an effective international safeguards system 

* The idea of using the threat of cutoff of U.S. food exports to dissuade 
nations from testing nuclear explosives was proposed by a floor amendment 
to the International Development and Food Assistance Act during Senate con- 
sideration of this legislation (H.R. 9005). An amendment was proposed to 
prohibit assistance under the Foreign Assistance Act of 1961 or the Agricul- 
tural Trade Development and Assistance Act of 1954 to any country which 
has detonated a nuclear explosive device within five years of the time such 
assistance is proposed to be provided. The amendment was tabled after 
considerable debate. The essence of the opposition is evident in the following 
remarks by a Senator speaking against the amendment: 

The Government is engaged in a foreign assistance program not be- 
cause we love everybody else in the world but because we think it is 
good national policy and because the American people overwhelmingly, 
in every survey of public opinion, have stated that they are prepared 
to share and share and share our food. For Congress to place a road- 
block to assistance to a country like India merely because she has de- 
tonated a nuclear explosive within the late five years is to cut off our 
nose to spite our face. 

Cf. , Congressional Record, November 4, 1975, p. S19209 (daily edition). 



97 



CRS-97 

witnesses saw an urgent need for tested contingency planning mechanisms 
and, ideally, for some preliminary plans. 

IAEA safeguards assessed . --As more nations reach the threshold of 
greatly increased use of nuclear energy- -and assuming that certain 
perplexing safety, economic and technological problems are favorably re- 
solved-witnesses felt that it is time to think about the accomplishments 
of IAEA safeguards to date and their prospects for the future. 

First of all, the Agency has pioneered the practice of inspection of na- 
tional activities by international inspectors. The very fact that IAEA in- 
spectors can get access to nuclear materials and facilities in states with 
which they have signed safeguards agreements is a striking accomplishment 
that should not now be overlooked because it has become commonplace. 

Having said this, one must also note that the work of IAEA's inspectors 
is essentially at the forebearance of the inspected state. Any nation may, 
withdraw from the NPT or from the IAEA with no penalty and close its 
borders to inspection. 

Again on the positive side, the IAEA safeguards inspections and other 
activities provide a useful cross-check upon the workings of domestic nu- 
clear materials accountability systems. 

In terms of the ability of IAEA safeguards to slow or impede prolifera- 
tion, the views of Commissioner Gilinsky are important. He sees much 
that is valuable in IAEA safeguards but would not mistake them to be an 
infallible, magic answer. His advice was:* 

* July hearings, p. 51. 



98 



CRS-98 

U.S. policy on preventing the spread of nuclear weapons re- 
lies heavily on the Nonproliferation Treaty and international in- 
spections administered under that treaty. The treaty is not 
universal; a number of countries important in this context are 
not parties to it. The IAEA inspection system, which has begun 
to take on some fiber as a consequence of the IAEA's responsi- 
bilities under the treaty, is still a slender reed. The chief 
value of IAEA safeguards under the NPT is that their acceptance 
is a demonstration of an intention, at least for the present, to 
resist the temptation to build nuclear weapons. 

These inspections cannot, of course, cope with an abrogation 
of the NPT after acquisition of civilian facilities and materials 
transferable to military purposes. Moreover, as a broad array 
of nuclear technology is deployed the leadtime to turn this tech- 
nology to military uses will be reduced and the value of the in- 
spections will be lessened accordingly. Nevertheless, we have 
been working hard at strengthening this system. And if it is 
not overstrained, the inspection system could provide a vital 
alarm which, if it came early enough, could allow time for pre- 
ventive action. 

In looking at the safeguards situation. Dr. Taylor spoke of new op- 
portunities for improving national safeguards that are likely to substan- 
tially increase confidence in the United States safeguards system. At the 
same time, he saw strong indications that other countries are becoming 
concerned about possible theft of nuclear materials within their borders 
by terrorists or other criminals. It is in their national interests to take 
steps to assure the physical security of these materials. As for IAEA safe- 
against further national proliferation, he was much less optimistic, saying:* 

. . . As far as technology and economics are concerned, I can 
visualize a system of IAEA safeguards that would make it very 
difficult for a country to divert nuclear materials from peace- 
ful to military applications without detection . But an IAEA 
safeguards system that is highly effective in detecting diversion 
where it is applied will not directly inhibit proliferation in coun- 
tries that refuse to accept IAEA safeguards, or in countries that 
decide to abrogate agreements for one reason or another. 

* July hearings, p. 75. 



99 



CRS-99 

To put it bluntly, I must say that any country in the world 
that really wants nuclear weapons during the next several de- 
cades will be able to acquire them, one way or another. 

The demand upon IAEA safeguards will soon increase. One increase 
will come when Euratom gives final notice to the Agency of its acceptance 
of a safeguards agreement under which the IAEA will apply its safeguards 
to the nuclear activities of much of the European nuclear industry. The 
other increase will come when negotiations are finally completed between 
the IAEA and the United Kingdom and the United States to voluntarily place 
some nuclear installations of these two nuclear weapons states under IAEA 
safeguards. Even to place a few selected installations of the U.S. and U.K. 
nuclear industries under IAEA safeguards will increase the requirements 
for inspectors and funding for their salaries and travel expenses. Compli- 
cating the situation are the prospects for safeguarding fuel reprocessing 
plants which, in many ways, will be the most troublesome part of the whole 
nuclear fuel cycle. The IAEA has had some experience with small fuel 
reprocessing plants of the Nuclear Energy Agency of the Organization for 
Economic Cooperation and Development (OECD), but it is not clear how 
well prepared IAEA safeguards systems, personnel and technical capabi- 
lities will be to deal with large scale, commercial reprocessing. There 
will still be some time to prepare, for the NRC on November 12, 1975, 
announced that it would not decide upon the future licensing of plutonium 
recycle for another 18 months. There is little point in reprocessing spent 
nuclear fuel if the recovered plutonium cannot be reused as fuel. During 
these coming months NRC intends to inquire in depth into the safeguards 



100 



CRS-100 

aspects of plutonium recycle. Similarly, successful demonstration of the 
commercial utility of the centrifuge method of enrichment now being de- 
veloped in Europe could increase demands upon IAEA safeguards if various 
nations apply this technology to attain their own independence for enriched 
f ue Is . 

On the whole, the next few years appear as a critical time both for de- 
velopment and carrying out of a strong U.S. policy to strengthen IAEA 
safeguards, and the corresponding increase in this IAEA capability. These 
seemingly straightforward purposes may, however, feel the backlash of 
the ultimate United States reaction to the United Nations resolution in 1975 
that equated Zionism with racism. If U.S. participation in international 
organizations is lessened, then it is none too early to consider the impli- 
cation of such policy for the IAEA and its future effectiveness as a limited 
deterrent to further proliferation. 
International or Regional Nuclear Fuel Cycle Facilities 

The fewer installations that are involved in making or processing nu- 
clear materials, the fewer are the points of exposure to theft or diversion. 
Likewise, large regional plants operated in the glare of full publicity as 
multinational ventures are expected to be less susceptible to theft or diver- 
sions of nuclear materials than would be many small, scattered plants 
operating in near secrecy. Safeguarding a few large plants appears more 
likely to be effective than trying to safeguard a comparable output from 
many, scattered plants. So it was not surprising that many witnesses be- 
fore the Subcommittee favored the concept of regional, multinational plants 
for enrichment and fuel processing, and perhaps for fuel fabrication. 



101 



CRS-101 

The State Department cautioned that reprocessing and enrichment faci- 
lities present difficult safeguards problems. Effective safeguards for faci- 
lities of this type will require continuous attention and probably resident 
IAEA inspectors. Even were regional facilities to be effectively safe- 
guarded, there is the possibility that their technology might be acquired 
and used in unsafeguarded activities of member countries. Because of the 
proliferation potential of reprocessing and enriching facilities, the United 
States does not favor the widespread introduction of these facilities among 
many nations. * So the State Department also favors regional centers to 
minimize the number of such plants and at the same time to reduce their 
proliferation risk. The State Department reported to the Subcommittee that 
the IAEA is currently undertaking a feasibility study of such centers. The 
U.S. strongly favors this study and has urged other IAEA member states 
to give it their full support. * 

Reprocessing and enrichment of nuclear fuel outside the United States 
under .multinational management, preferably under the IAEA, was also 
favored by industry witnesses** and also by Ms. Cahn of Harvard Univer- 
sity.*** She further recommended that Congress veto any agreement for 
cooperation with Iran which does not provide for reprocessing on a regional 
or international framework. 

* Cf. , statement of M. Kratzer, State Department, July hearings, p. 8. 

** Cf . , statement of A.L. Bethel, Westinghouse Electric Corp., Ibid . , 
p.63. 

*** April-May hearings, p. 742. 



102 



CRS-102 

Dr. Scoville proposed that the best form of control for proliferation 
risks from nuclear fuel reprocessing is not through bans on technology 
exchange, which might be impossible to enforce, but through a positive 
program of internationally managed centers to satisfy the reprocessing re- 
quirements of many different countries. These centers could also have fuel 
fabrication and storage facilities colocated in them. This would provide 
a sound economic approach, reduce the safety problems, and most impor- 
tantly, decrease the risks that the processed plutonium could be diverted 
or turned into weapons. The availability of such centers would reduce the 
pressure on supplier nations to help other nations build national facilities. 
This approach should be pursued with urgency as part of a broader effort 
to encourage the multinational ownership and operation of chemical repro- 
cessing, fuel fabrication and associated material storage facilities. * 
Informal Agreement Among Nuclear Supplier Nations 

The international framework for measures to limit proliferation in- 
cludes also an informal element which may in time have to become more 
formal. This refers to the informal agreement among the governments of 
the nuclear supplier nations upon common policies for nuclear exports. 
During the last year there have been informal and confidential negotiations 
between the United States, France, the Soviet Union, the United Kingdom, 
West Germany and perhaps other governments. Congressional attempts to 
find out more about U.S. participation in these negotiations have not been 
particularly successful. The importance of obtaining a better understanding 

* Ibid., p. 754. 






103 



CRS-103 

is under scored by advice at the hearings that the success of non-prolif- 
eration efforts is critically dependent on the policies not simply of the 
United States but of all major suppliers, and that the goal of non-prolif- 
eration can be more effectively realized if suppliers "...adopt certain re- 
straints which go beyond the NPT undertaking, to supply nuclear materials 
and equipmennt only under safeguards."* 

A decade ago the United States probably could have dominated such ne- 
gotiations. Now, as Commissioner Gilinsky observed, the United States no 
longer controls the spread of nuclear technology though out the world. The 
ability of the United States to prevent the export of the total technological 
package necessary for making nuclear weapons is now lost to us, and the 
only recourse he sees lies in the development of agreement among the 
world's suppliers to "...conduct their trade on a basis that takes into ac- 
count the consequences of providing additional countries with everything 
they need to make a bomb. "** The possibilities for control vary, in his 
opinion, but in the end they v/ill depend on agreement among the major 
industrialized supplier countries that further proliferation condemns us all 
to danger and insecurity. 

A principal issue in these informal discussions is whether a supplier 
state should require the receiving state to place all of its nuclear activities 
under IAEA safeguards rather than just the materials and facilities covered 
by the export transaction. If the supplier nations would agree to this, it 

* July hearings, p. 14. 
** Ibid., p. 51. 



104 



CRS-104 

would offset the uncertainties caused by those nations which still will not 
ratify the NPT and place all their nuclear activities under IAEA safeguards. 
Another urgent issue is whether nuclear supplier nations should export en- 
richment and fuel reprocessing and fabrication technology equipment and 
facilities to any nation that wants them. The case of Brazil highlights this 
issue, for the West German Government apparently was willing to permit 
export of a virtually complete fuel cycle to Brazil, whereas U.S. Govern- 
ment would not permit the U.S. nuclear industry to do so. 

The problem of differing attitudes among the governments of nuclear sup- 
plier countries was highlighted in testimony from the nuclear industry. One 
representative reported that competing overseas suppliers seem less re- 
stricted by government rules as to nuclear exports than ours, but noted also 
that without the influence of the United States, the international rules might 
be further watered down. This prospect will increase without an overall 
agreement among all suppliers on universally applied policies for nuclear 
exports. * 

The need for consistent export policies among nuclear supplier states 
also was emphasized at the NPT review conference last May. The Con- 
ference urged that common export requirements for safeguards be strength- 
ened, in particular by extending the applications of safeguards to all peace- 
ful nuclear activities in importing states not party to the treaty. 

While informal and secret negotiations may be necessary to 
quick agreement among nuclear suppliers to close a gaping loophole for 

. , ■ men1 of A.L. Bethel, Westinghouse Electric Corp. Ibid . , p. 64. 



105 



CRS-105 

proliferation, it appears precarious to rely upon unpublished informal agree- 
ment as a long-term preventative. So the Subcommittee may wish to give 
attention to the progress of these negotiations and longer range plans to 
transform them into more binding international agreements. 

o 



ERSITY OF FLORIDA 




3 1262 09113 9906